BMI View: We believe near-term growth in Myanmar's construction sector will remain at levels that are modest relative to its massive growth potential. The sector remains unable to achieve its full potential due to limited upside to foreign investment - the main driver of construction activity - and the numerous threats to the country's political environment before and during the 2015 general elections. In addition, issues with two of Myanmar's largest infrastructure projects have highlighted the lack of maturity in the country's business environment.
Key Trends And Developments
In February 2014, US-based mobile turbine power firm APR Energy secured a contract to construct a 100MW gas-fired power plant in the central Mandalay region of Myanmar. The project was won through an open tender conducted by Myanmar's Ministry of Electric Power. The plant will have capacity to supply power to more than 6mn people. The power plant will be supplied with natural gas using the country's Shwe gas pipeline. Investment details about the project have not been disclosed.
In February 2014, United Overseas Bank (UOB) and Singapore-based Asiatech Energy signed a financing agreement that would see UOB provide financing for Asiatech to build a 230MW combined-cycle gas-fired power plant in Myanmar. The project will require a total investment of USD170mn, but UOB did not disclose the size of the loan that it will be extending to Asiatech. Asiatech was commissioned to build the power plant in Mawlamyaing township in Mon state by Myanmar Lighting IPP, and the plant is scheduled to start operating by end-2015. MLC will own and run the power plant, while Myanmar Electrical Power Enterprise will distribute the electricity.
In February 2014, the Ministry of Electric Power announced that Myanmar's IGE Company plans to sign a joint venture with China's Hydrochina Corporation to build the 1200MW Naungpha hydropower plant project on the Thanlwin River, reports Eleven Weekly Media....
"Myanmar's latest political and economic awakening appears to be the 'real deal' and - as with any 'new' investment story - foreign interest is likely to reach fever pitch in the coming years. As seen in other resource-rich frontier markets, we expect a number of key sectors to dominate investor attention in the short to long term."
Business Monitor International (BMI) has just published 'Myanmar Awakens: Unearthing Asia's Hidden Gem', a brand new special report that examines the economic growth prospects for Myanmar as a resource-rich frontier market in the medium to long term.
Use BMI's core views on Myanmar's country and industry development to enhance your investment decision-making and strategic planning activities, assessing key questions such as:
- Will a fair and transparent electoral process in Myanmar pave the way for relaxation of the US and EU economic sanctions?
- With soaring economic prospects forecast for Myanmar as a result of its ongoing reform drive, how will China's interests be affected?
- Will foreign investment prevail in the short or long-term given the history of poor market accessibility?
- Will heavy investment in Myanmar's real estate market offer sufficient liquidity to entice an international audience and what will be the key barriers to overcome?
- Which key sectors will be the main outperformers for Myanmar in the short term?
- Which key sectors will be most promising in the long term?
The special report draws on BMI's 27 years of experience to critically assess the greatest economic and political risks for Myanmar in the years to come, helping you assess the opportunities and challenges for your business in 2012 and beyond.