A hydro-electric-powered energy revolution has been afoot in South-East Asia over recent years with the movement of fresh and fast-flowing waters increasingly fueling the consumption of larger amounts of energy resources to spur socio-economic development, poverty reduction and improvements in both urban and rural areas.
The region’s most diminutive nation Laos has been at the center of this revolution, posting significant increases to generation capacity by harnessing the energy from the many rivers that run down from its mountainous regions before joining the Mekong that flanks the country to the west for most of passage from the country’s north to south.
The lessons learnt among operators in Laos are now ready to be shared as fellow Mekong-side nation of Myanmar is progressing with its own aspirations for the development of its own vast hydropower potential.
The developments are parts of big plans for increased regional connectivity and cheaper, cleaner and more abundant energy for development that can benefit the majority of the millions of rural dwellers still living without stable electric power in their daily lives. The developments are expected to benefit up to 34 million (66 percent) of those living in Myanmar alone.
In mountainous and sparsely populated Laos, the increasing volume of power being generated not only goes to larger neighboring markets to produce much needed export revenue to support national expenditure, but also helps power the domestic market to support everything from the electrification of rural and remote Lao villages to the supply of affordable and stable power supplies to factories. Such factories are essential to powering increasingly regionally-focused manufacturing value chains that in turn create employment opportunities for more people within their own nation.
Like any grand undertaking, unlocking the potential of hydropower through development of a project requires a mix of technical skills and expertise, as well as ready access to a thorough understanding of the local and international legal, social, environmental and business landscapes, in order to deliver the socio-economic benefits promised by the projects safely and securely.
With its vast expertise and experience gathered in hydropower developments at home, Chinese operators have been well placed to be represented in the rapid development of the sector in Laos, and are already key stakeholders as operations in Myanmar move to a new stage in their development.
Also navigating this promising yet challenging terrain to contribute greatly to the success story of the rapid growth of the sector in these two countries is the International Finance Corporation-supported Hydropower Developers Working Group (HDWG), which is also backed by the government of Australia.
A member of the World Bank Group, the IFC has a long track record of investing in the hydropower sector, investing over 1 billion U.S. dollars in around 25 countries including Chile, Guatemala, Nepal, India, the Philippines, Uganda, Turkey, Georgia, and Pakistan since the early 1990s, a record that also includes a more recent equity investment of 125 million U.S. dollars to the China Three Gorges South Asia Investment Limited (CSAIL), the sponsor of several hydropower projects in Pakistan including the Karot (720MW).
Reserved for hydropower companies and industry-related professionals working for the private sector, the IFC-supported HDWG concept sees sector operators meeting four times a year to receive updates on local policy and law and support information sharing between companies and news related to the hydropower sector and provides a basis for sector wide engagement with government regulators.
With hydropower developers gathering in Yangon to welcome the launch of Myanmar’s own HDWG next week, Chinese companies are again being invited to share in the benefits that come through collaborations in a field of sector professionals with international expertise, ready and able to provide support for best practice and stakeholder engagement on all issues of interest to the sector.
The welcome to the Yangon launch, which will take pace on Thursday, comes three years after the establishment of the HDWG in Laos, a period which has seen several Chinese companies including Datang and China Southern Power Grid serve as active participants.
Speaking to Xinhua, Vientiane-based co-Chair of Hydropower Developers’ Working Group, Robert Allen, said he had received interest from Chinese developers active in Laos about their participation in the equivalent group in Myanmar, with them keen to access the benefits from ongoing collaborations.
“Several of the companies that are members in Laos have also expressed interest to join in Myanmar as the group is an opportunity to stay up-to-date on news from the sector and help push the sector in the right direction,” Allen said.
“Chinese hydropower companies have tremendous experience developing projects worldwide. With their experience they bring lessons learned for other developers to learn by,” he added.
“Likewise, the working group will provide Chinese companies with an opportunity to network and learn about international standards that they may not have access to otherwise,” Allen explained.
Impetus for raising the bar on best practice is also coming from financiers, with Chinese banks playing an increasingly important role in shaping hydropower projects by requiring developers to adhere to higher environmental and social standards before approving loans, according to the IFC.
As recently as 2015, the China Banking Regulatory Commission (CBRC) met IFC in a roundtable discussion in Beijing on how banks can improve environmental and social risk management in hydropower projects, as well as finding a need to better address and understand contextual issues including social issues such as resettlement in overseas projects with varying issues and scenarios compared to those within China itself, according to the IFC.
IFC Hydro Advisory Team Lead, Kate Lazarus, again extended the invitation to representatives of Chinese hydropower companies to a General Forum at the Thursday launch to learn more about what the HDWG plans for Myanmar’s hydropower sector and to network with other developers.
“In Myanmar, Chinese hydropower companies have had a long-term presence including holding a large proportion of hydropower concessions. They continue to penetrate the quickly growing market,” Lazarus said.
“Chinese hydropower companies can play a role in improving the sector by working with other international and local developers, and their presence will demonstrate that Chinese companies are committed to improve the sustainability of business operations,” she said.