Lights off in Myanmar
For people in Myanmar the energy sector has become an important battleground as they try to bring the military junta to its knees. The country was forced back under military rule on 1 February 2021, sparking widespread protest and a violent crackdown from the military. Almost 1,200 people have been killed and over 7,000 detained since the coup.
Any form of campaigning has become illegal and environmental activists have gone into hiding. Thousands of staff from the Myanmar electricity ministry are on strike, hampering its capacity to conduct tenders, maintain the grid and collect electricity payments. Ordinary citizens have started refusing to pay electricity bills, while the anti-junta resistance fighters have destroyed power cables in some areas of the country. As a result, power outages have become more common and longer. Even before the coup, there was growing resistance against major energy developments in Myanmar.
‘We tried to advocate against large-scale dams and made policy recommendations to the government,’ says a spokesperson from the Save The Salween Network, a group fighting to protect the Salween/Thanlwin River from hydroelectric dam projects they say threaten the livelihoods of ethnic minority communities, as well as the biodiversity of the region.
The spokesperson explains that energy decisions under the previous civilian government were not transparent, ‘particularly on the projects pursued with China’. Due to its proximity, China has always played an outsized role in Myanmar’s power sector and its companies have been involved in the development of hydropower. Chinese firms have built 17 dams, often with financial support from their state-owned banks.
Instability and opposition
The coup has effectively forced foreign oil and gas exploration companies to halt their activities and nullified the public tender which Myanmar had previously launched for the construction and operation of ground-mounted solar technology, replacing it with a flawed process that would produce less electricity than previously planned.
Against this backdrop, the military regime has sought to implement 12 solar power projects of its own by trying to raise enough foreign currency. However, according to sources from the Ministry of Electricity and Energy, foreign investors have not been able to transfer money to the regime due to the sanctions against it and this contributed to the September depreciation of the kyat, Myanmar’s currency.
The instability has implications for inflation and electricity supply, as the government must choose between expanding money supply to pay for the growing deficit, largely caused by energy sector costs, or cutting electricity purchases from private sector producers.
Among the factors sinking Myanmar’s economy are an increase in liquefied natural gas (LNG) prices in the international market, a decline in electricity demand and the regime’s inability to pay electricity suppliers. As a result, since July, two Chinese-backed LNG power plants have halted operations, which is expected to create even more blackouts.
Over the past decade, the number and diversity of Chinese organizations trying to compete for their share of Myanmar’s booming power sector has grown quickly. Whereas Chinese firms were almost exclusively focused on hydropower until the 2011 transition, they also entered into solar and LNG contracts under the civilian government.
China is also behind Myanmar’s largest coal-fired power plant which was constructed in co-operation with military-linked businessmen on land expropriated from indigenous communities. Despite upgrades, the Tigyit power plant has continued to be contested by local people, as well as environmentalists, due to alleged pollution and health problems it has caused.
Although Chinese President Xi Jinping announced in September 2021 that they would no longer build coal-fired power projects abroad, doubts remain as to whether this pledge includes equipment supply and financing, to say nothing of questions around China’s policy toward other non-coal fossil fuels.
Three hydropower dams in Myanmar’s northernmost Kachin state were designed to export part of their production to Yunnan province in China. The largest ongoing dam construction project, Upper Yeywa, is funded by China’s Export-Import Bank and implemented by a group of foreign companies that includes two Chinese state-owned enterprises.
Also, at the end of May, Min Aung Hlaing, a coup leader, mentioned the possibility of resuming the controversial Hatgyi Dam project. Civil society groups claim that 90 per cent of the electricity generated from this project would be sold back to the investors’ countries – China and Thailand.
Although China has blocked the attempts of the UN Security Council to impose an arms embargo on Myanmar, there are signs that it is not satisfied with the generals’ grip on power. Before the coup, Myanmar was looking forward to more investment and technological transfers from its neighbour, including in renewable energy generation.
Experts argue that political instability and conflicts with rebel groups may lead China to question whether Myanmar is an appropriate target for further power sector investments. China surprised commentators by opposing the dissolution by the generals of Myanmar’s hitherto ruling party, the National League for Democracy (NLD). The NLD’s leaders remain imprisoned on politically-charged grounds.
On the ground, the Save The Salween spokesperson remains anxious about the possible loss of land for local communities and the potential for increased armed violence: ‘The military might still continue the dam projects, not just for the sake of generating the electricity, but for the militarization of the area.’ Shwe Hein, a Myanmar economist who joined the boycott of the junta is more hopeful. ‘Projects are unlikely to move ahead due to violent conflicts,’ he says.
It remains to be seen what will finally bring down the military regime that has been terrorizing Myanmar’s population for decades. Incapacitating it through energy blackouts could be the boost the Myanmar resistance movement needs.
Robert Bociaga is a writer, journalist and photographer focused on Southeast Asia and East Africa.
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