India Grants $124 Million Credit to Myanmar for Power Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--India has granted a $124 million line of credit to Myanmar's government in order to build three major transmission projects and a 120-megawatt (MW) power plant. The three 230-kilovolt (kV) transmission projects will be built by Power Grid Corporation of India (New Delhi, India). India has already signed a $64 million line of credit for the transmission projects. The Export-Import Bank of India (Mumbai) is extending the line of credit.

India's government is extending another $60 million in credit for the construction of three 40-MW power plants in Thatay Chaung. Bharat Heavy Electricals Limited (BOM:500103) (New Delhi, India) will execute this project.

Myanmar's government would like India to be involved in the construction of the 660-MW Shuve Saysay power project and the 1,200-MW Tamanthi power project. Both projects will tap the hydropower of River Chindwind.

The Export-Import Bank and the Myanmar Foreign Trade Bank (Yangon) signed another agreement under which a $20 million aluminum conductor steel reinforced wire-manufacturing facility will be set up in Myanmar.

India is Myanmar's fourth largest trading partner after Thailand, China and Singapore, and the second largest importer after Thailand. India takes 25% of Myanmar's total exports. As of January 2008, India has invested $219.57 million in the form of various contracts. The Oil & Gas sector drew $137 million last year.

India and China are actively competing for greater influence in Myanmar. Myanmar has recoverable gas reserves of about 51 trillion cubic feet, which is attractive to both India and China in the face of high crude oil prices. Myanmar has not exploited its rich sources of energy, as it has been prevented by sanctions to access the liquefaction technology required to become an exporter of liquefied natural gas. It is left with the sole option of selling gas by pipeline.

The junta in Myanmar has a monopoly over all economic activity in the country and China has adequate influence over the country's political and economic activity to sway the junta in its favor. China has been developing an apolitical relationship with Myanmar, showering it with weapons and cash. It has played a key role in the regime's survival. China has successfully established the necessary infrastructure required to make use of Myanmar's expanding oil and natural gas reserve. China's plans to invest in other infrastructure projects will further strengthen its position in Myanmar.

Although bilateral trade between India and Myanmar has increased in the last decade, it is yet to take off in the strategic energy sector. India's ONGC Videsh (New Delhi) and Gas Authority of India Limited (BOM:532155) (New Delhi) have been exploiting a few oil fields, but the sizes of the oil fields are much smaller than the ones for which China has secured exploration rights.

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