Monday, August 19, 2013

China Becomes 'Key Investor' in Southeast Asia's Hydropower

China Becomes 'Key Investor' in Southeast Asia's Hydropower
August 19, 2013, Daily Fusion


China has emerged as a key player in both financing and building the
hydroelectric power infrastructure in Southeast Asia. China invested
more than $6.1 billion between 2006 and 2011 in financing 2,729
megawatts (MW) of capacity additions. Between 2006 and 2011, Chinese
investors�such as the state-owned enterprises Export Import Bank of
China and China Development Bank�financed 46% of all hydroelectricity
capacity additions in Cambodia, Laos, and Myanmar and developed
previously untapped hydroelectric resources in countries bordering the
Mekong and Irrawaddy river basins. This investment represented 6% of the
total global hydroelectric power capacity currently under construction
and 10% of the planned capacity additions outside of Brazil, Russia,
India, and China.

Southeast Asia has one of the world's fastest-growing regional economies
and is also home to some of the world's largest untapped hydroelectric
resources. Through 2018, the International Monetary Fund expects the
relatively small economies of Cambodia, Laos, and Myanmar will see rapid
economic growth within the region and will meet the increased energy
demand with electricity from the new hydroelectric capacity. The
combined percentage of hydroelectric generation relative to total
generation in these three countries is expected to rise to 96% in 2030
from 80% currently, according to data from the Association of Southeast
Asian Nations (ASEAN).

Much of the future electricity generated from the Chinese-financed and
-constructed hydroelectric facilities in neighboring Myanmar and Laos is
expected to be exported to China's rapidly growing southern regions.
Cambodia does not share a border with China.

Details on hydroelectric projects and funding in each of the three
countries follow:

According to ASEAN, hydroelectric power is expected to account for 77%
of Cambodia's total electric generating capacity by 2030. By contrast,
hydroelectric power accounted for less than 4% of Cambodia's 386 MW of
electric generating capacity in 2007. Much of Cambodia's hydroelectric
power expansion to date was financed by China. In December 2010,
Sinohydro�a Chinese state-owned hydropower engineering and construction
firm�completed the construction of the 184 MW Kamchay Dam project at a
cost of $280 million with financing from the Export Import Bank of
China. Separately, at a cost of $1 billion, China is sponsoring
construction of Cambodia's Stung Tatay and Stung Russey dams, which upon
completion will be among Cambodia's largest hydroelectric power
projects. Cambodia plans to build 10 dams between 2010 and 2019, adding
2,045 MW of capacity. Chinese entities are providing financing for six
of these dams.

Almost all of Laos's 731 MW of electric generating capacity was
water-based as of 2007, and all future capacity additions are expected
to be hydroelectric. China's investment capital is expected to add more
than 2,000 MW of capacity to the Laotian grid. Added capacity has turned
Laos into a major regional exporter of electricity, much of which goes
to China. In 2011, Laos exported almost 678 million kWh, or nearly 32%
of its total generation, and electricity exports accounted for about one
third of its total exports.

About 98% of Myanmar's electricity needs are expected to be generated by
hydroelectric plants in 2030; in 2007 this figure was about 50%. A
centerpiece of China's investment in Myanmar's hydroelectric generating
capacity is the 6,000 MW Myistone facility. Estimated to cost $3.6
billion, Myistone was to be one of the largest hydroelectric plants ever
built. Even though the Myistone Dam project remains on hold,
construction has begun on 13,200 MW of future hydroelectricity capacity
in Myanmar's Irrawaddy River basin, financed by both Chinese and Thai
investors. The electricity produced by these dams is intended for export
to China and Thailand.

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