Government and private electric power companies to sign PPA soon

The Power Purchase Agreement (PPA) between the government and private electric power companies is in its final stages, sources say.

“The PPA has not been signed according to the instructions of the World Bank. International banks won’t loan to us if we are not following the instructions of the World Bank. We are negotiating because the government is asking us to add some details in the agreement,” said Zeya Thura Mon, CEO of Zeya & Associates Co. Ltd.

The private companies have not directly signed contracts with other private companies.
“The companies will sell electricity according to the government’s agreement. The agreement will be signed for at least 15 years. If not, the cost will be larger for a short-term agreement,” he said.

Under the agreement, the unit price and tax are included. After due date—expected to be 15 years—there may be changes to the agreement.

At present, the government has increased electricity charges to 150 Ks per unit for commercial use.

About 30 percent of the total population have access to electricity. Funds are needed to construct electricity generating plants and a national power grid for the rest of the population. The government, which has lost an average of 22 Ks per unit and Ks 185 billion per annum, needs to cover such losses with surging prices, Aung Khaing said.

The government has said it has no intention of reducing electricity prices yet.

“The surging bills can be damaging for the common people. The people have to pay the bill because the government says they have no intention of lowering the prices yet. But if they want to increase the charges, they should provide electricity regularly. If they can’t do that, then raising the costs won’t have any effect except to hurt the average person more,” a production business owner said.

With meter charges going up, some wholesale businessmen have distributed notices to retailers about the increase in some commodities prices as expenses have gone up.

source: Eleven Myanmar
http://elevenmyanmar.com/national/3991-government-and-private-electric-power-companies-to-sign-ppa-soon