Ministry of Electricity and Energy will not extend for major solar farm tender1 Jun 2020
Myanmar’s Ministry of Electricity and Energy has rejected requests from prospective bidders for a major solar farm tender to extend its one-month deadline, which they say is impossible to meet because of the COVID-19 crisis and tough conditions attached.
“At the moment, EPGE does not consider any extension of Bid Submission Date,” the Electric Power Generation Enterprise (EPGE) said, according to its clarification document seen by The Myanmar Times.
The clarification to the invitation to bid was issued as part of the tender document, according to a letter from the EPGE addressed to potential bidders. The letter was dated May 29 and signed by EPGE managing director U Than Naing Oo.
The decision was made despite grumbles from local and international investors over what they say is an impossible timeline to meet the June 18 deadline.
But the feedback from investors and embassies reflects what businesses see as the ministry’s tendency to roll out tenders in a way that scares off competition. Many are already disappointed with the emergency power tender rushed through last year, which also gave bidders around a month to bid for five energy projects totalling 1GW.
As The Myanmar Times reported, Western business groups on May 25 wrote to energy minister U Win Khaing asking for a delay to the solar tender deadline and for tough conditions to be revised to give prospective bidders more room to prepare for the tender.
European and US chambers of commerce in Yangon said in their letter: “As the COVID-19 pandemic continues, potential foreign bidders and suppliers are not able to inspect the sites associated with this tender, nor are they in a position to prepare a thorough response to the tender.”
“For companies that are considering this opportunity with any kind of financing option, with local or foreign lenders, the current deadline of June 18 is impossible to support,” they added.
The criticism is shared by local and Asian investors who spoke to this newspaper.
Land documentation is a key challenge in meeting the timeline since evidence of potential land acquisition is required as part of the bid. There is also a risk of land grabs under the tight schedule. Responding to questions of what support the EPGE will provide for foreign bidders to acquire land, and how to deal with associated “disturbances from various goons in different areas”, and how to conduct site visits amid the COVID-19 travel constraints, the EPGE says “Land is arranged by the Bidder.”
The EPGE clarified that bidders have to provide supporting letters from regional governments to confirm that the proposed areas are not covered by government plans.
The tender, issued on May 18, invites companies to bid for the construction of 30 ground-mounted solar plants capable of generating 1060MW of power in total under a 20-year build, operate and own basis. The plants need to start commercial operations within 180 days after the letters of acceptance are issued.
On the same day that the energy ministry informed bidders of this decision, investment minister U Thaung Tun told foreign investors during a webinar organised by AustCham Myanmar that the government is aware of the difficulties but said that the government wants “to proceed with the 1000MW solar tender quickly.”
During the webinar, U Thaung Tun said that energy will be required for Myanmar’s manufacturing industry to “take a leap forward” and that the government has been arranging proposals to establish more energy generation projects, including renewables. He said measures will be rolled out under Myanmar's COVID-19 Economic Response Plan to expedite investment approval processes in Myanmar.