Hydropower, mining, oil and gas sectors cover 85 per cent of total investment

Investment sectors in hydropower, mining, oil and gas covered 85 per cent of total investment in Myanmar, said Aung Naing Oo, Director General of Directorate of Investment and Companies Administration in a conference held at Myanmar Investment Commission Office in July 25. (ELEVEN MEDIA)

“The main foreign investment in Myanmar is hydropower. The investment in hydropower sector has over 40 per cent of overall investment. Exploring oil and natural gas came second and has over 30 per cent of total investment. The third is the mining sector and has 7 per cent of total investment,” he said.

Myanmar has now over US$42 billion from foreign investment and China is top among foreign investors. China’s investment accounts for 34 per cent of total foreign investment. Although foreign investment in above sectors is up, investment in production and agricultural sectors has a little investment.

“Although foreign investment those three sectors are high, investment in agricultural which is the important sector for 70 per cent of total population and labour intensive industries which can create many job opportunities are low. We are trying to make investment increase in those sectors,” the director general said.

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Japan funds three projects in Laos

The government of Japan, the largest provider of financial assistance to Laos, has provided more than 558.7 billion kip (7.4 billion yen) to fund three projects in Laos, a press release has said.

More than 417 billion kip in loans will be used to finance the expansion of the Nam Ngum I hydroelectric project, and more than 18.8 billion kip in grants will be provided for human resource development in 2013-2014.

Meanwhile, the remaining 123.8 billion kip will be used to build a water supply system in Thakhaek district, Khammuan province.

Deputy Prime Minister and Minister of Foreign Affairs, Dr Thongloun Sisoulith, signed the exchange of notes with his Japanese counterpart Mr Fumio Kishida recently in Tokyo to receive the financial assistance, according to the press release from the Lao Ministry of Foreign Affairs.

Dr Thongloun visited Japan to attend the 19th International Conference on ‘The Future of Asia’ in Tokyo, which took place on May 23-24. The conference was organised by the Japan-based news agency Nikkei.

On May 23, the Lao minister met with his Japanese counterpart.

“Both sides discussed and exchanged views on bilateral relations and cooperation, regional and international issues and signed the exchange of notes,” the press release said.

Dr Thongloun asked for Japanese assistance for an industrial park and urban development project in Vientiane, with Mr Kishida saying Japan will duly consider it, the Japanese Foreign Ministry said, as quoted in the Global Post.

Mr Kishida added that Tokyo hopes to promote defence exchanges and private-sector ties with Vientiane, the newspaper reported.

According to the Lao Foreign Ministry, Dr Thongloun and his delegates also paid a courtesy call on Japanese Prime Minister Shinzo Abe.

He also met with the Japanese Deputy Prime Minister and Minister of Finance, Mr Taro Aso, when the two ministers discussed the economics and financial situation of their two countries, the region and the world.

Japan has been the biggest provider of Official Development Assistance (ODA) to Laos. From 1958-2011, more than US$2,097 million of ODA was provided to finance development projects in Laos, according to the Lao Ministry of Foreign Affairs.

Japanese grants and loans have financed four primary areas – human resource development, agriculture and forestry, infrastructure development and hydroelectric development.

ODA has greatly contributed to the development of the Lao economy. Last fiscal year, more than US$704 million of ODA was provided to Laos by international organisations, friendly states and other donors.

By Times Reporters│27 May 2013│Vientiane Times

Solar panels see sunny times ahead

Officials and business people say solar panels are gaining in popularity in rural areas, where the power grid does not reach.

Mao Sangat, director of Solar Energy Cambodia, told the Post yesterday that his company saw increases of installation of solar power systems for families whose children worked abroad and remitted money to their parents.

He said that so far, there were no huge projects to equip solar panel systems in public places such as schools or hospitals in rural areas supported by NGOs, but solar panels were selling well to families in three provinces – Kampong Cham, Prey Veng and Svay Rieng.

“I sold about 100 units per month, and I’ve seen an increase of around 10 per cent from month to month” he said, adding that farmers are interested in using solar energy because there were no power lines laid to their villages and they never expected to get electric power from the government.

“They don’t expect the power grid to reach their homes any time soon,” he said, adding that “when they see goodness of lights from someone’s home, who have installed the solar panel, they started to install too.”

The price for a solar panels range from $175 to around $400, depending on the needs of the buyers, according to Sangat, who imports the equipments from Singapore, China, and Thailand.

He said most of the solar panel systems were sold at $550 per unit, which can be used for a few lamps, colour TVs or other purposes. He said solar panels are a better choice than generators, which are very noisy and expensive.

Yiang Tal, chief of administration of Rural Electrification of Cambodia, said Electricity of Cambodia (EDC) provided $4 million for the Department of Rural Electrification Fund (REF)  this year for providing loans to villagers and private electricity providers for implementing rural electricity development.

He said that some $2 million had been given for 4,000 solar panels for people in four provinces – Kampong Thom, Pursat, Kratie and Siem Reap.

He said that more than $1 million had gone to providing loans to private electricity providers to connect lines to rural homes, and all the connected families were required to pay back over two or three years without interest charges.

“We are targeting the villages which were off-line, and I think that to develop electricity power, the government could not do it alone, without the participation of the commercial sector and private providers,” he said, adding that the $4 million project will end in August this year.

Sek Sokha, a villager in Svay Chek commune in Romdoul district of Svay Rieng province, said that he just decided recently to install a solar home system costing of $1,100 after seeing how many villagers used them and how simple they were to operate.

With the two solar panels, he hoped it would provide power to eight lamps, a colour TV and loudspeakers, he said, adding “villagers use them a lot, almost every home”, he said, adding:  “I see it is easy to use, that’s why I decide to buy them too.”

Houy Chanthy, sales director at Khmer Solar company, said her company also sold mostly to the provinces of Kampong Cham, Prey Veng, Svay Rieng and Kratie. She said the sales are mostly in those provinces because the cost of electricity there was so expensive.

“I think that if the government extends power grids to most of the areas, the solar panel sales will maybe decrease,” she said. On the other hand: “If the government provides power late, the needs for solar systems will grow.”

ADB supports integration of regional energy systems

Vientiane (Vientiane Times/ ANN) — Countries in the Greater Mekong Sub-region can save US$14 billion over the next 20 years if they integrate their power transmission systems, according to a senior official from the Asian Development Bank.

A regional power grid connection would enable countries with hydro-power plants to export energy to other countries, saving up to US$700 million a year by reducing fossil fuel imports, the Bank says in its report on Asia’s Energy Challenge, released earlier this month.

A greater supply of hydro-power in the region would also help to reduce CO2 emissions by 14 million tonnes per year by 2020, the report highlights.

At present, countries in the region use different resources to generate electricity. Some, such as Thailand, Vietnam and Cambodia, rely on natural gas and imported fossil fuel, while others such as China and Laos harness hydro-power.

Countries in the region could share and exchange electricity generated from different resources if they connect their power grids, which would enable more efficient use of energy.

The ADB notes that while Asia has great potential for hydro-power development, only 20 percent of this resource has been utilized.

Laos has the potential to create an installed electricity generating capacity of 28,000MW, which would supply sufficient power to the whole of Thailand.

A senior economist at ADB Laos, Mr Soulinthone Leuangkhamsing, told Vientiane Times that Laos would benefit from regional power grid integration, saying Laos could export hydro-power in the wet season and import it in the dry season.

He said regional power grid connectivity would help Laos to secure sufficient power in the dry season, especially at a time when energy consumption is soaring. At present, Laos has to import electricity from Thailand for use in Vientiane during the dry season.

Mr Soulinthone said the export value of Lao electricity was about US$450 million in 2012, while the value of electricity imported in the same year was about US$45 million.

Laos should build hydro-power plants that are sustainable, he said, adding that energy development projects must protect the environment and ensure that people who have to sacrifice their land for dams have better lives after they relocate.

The ADB has provided loans for the Lao government to develop its national power grid, enabling provinces in the north and south of the country to access electricity for development purposes.

EDL buys Lao Viet Insurance service for seven hydropower plants

(KPL) A signing ceremony for a USD-635 million operational insurance contract for seven hydroelectric power plants in Laos was signed between the EDL GEN and the Lao-Viet Insurance in Vientiane on April 19.

The signatories to the agreement were General Director of the Lao-Viet Insurance Mr Pham Duc Hau and General Director of the EDL GEN Boun-oum Sivanpheng.

The signing was witnessed by Deputy Minister of Energy and Mine Khammany Inthilath, Deputy Head of Economic Commission of the National Assembly Mr. Bounpone Sisoulath and representatives of the Bank for Investment and Development of Vietnam.

Under the contract, the LVI is expected to provide insurance coverage for the seven hydropower dams including property risk insurance, operation continuity insurance, machinery depreciation insurance, operation continuity when broken insurance and post construction use insurance.

“This is a big and important contract for LVI. Although we have been in insurance business for five years our company has grown at a rate of 60 per cent per year we are increasingly emerging as a leading insurance company in Laos,” said Mr. Pham Duc Hau.

In the past five years, LVI has secured big deals with the Lao Airlines, Nam Kong 2 and Sekaman 1 hydropower plants, and construction projects of roads No. 2E and 1B and Mekong bridge in Bokeo province.

Cambodia’s bourse sees slow progress in 1st year of operations

PHNOM PENH, April 18 (Xinhua) — The Cambodia Securities Exchange (CSX) has seen slow progress in its first year of operations because there has been only one listed firm and public knowledge about the stock market remains low, officials said Thursday.

The CSX was officially launched trading on April 18 last year with only one listed enterprise, the state-owned Phnom Penh Water Supply Authority (PPWSA).

“Because there is only one product in the stock market now, so the trading action is limited,” Ming Bankosal, Director General of the Securities and Exchange Commission of Cambodia, which is the CSX’s regulator, told Xinhua over telephone. “I believe that the situation will be improving from this year as three or four enterprises are planned to list on the CSX this year.”

He said at the launching of the CSX, there were only 3,600 investors, but it was now up to 5,000 investors.

Ming Bankosal was optimistic about the market’s future, saying that for a long-term strategy, the stock market will hugely contribute to developing Cambodian economy.

“In my vision, the future of CSX will be bright as Cambodia holds the free market policy and foreign investors such as China, the United States, Japan, France, and the United Kingdom are confident in Cambodia’s political stability and economy, so more investors will come to Cambodia,” he said. “More investors will need more capitals, so the stock market will be one of their choices to mobilize capitals.”

Nguon Meng Tech, Director General of the Cambodia Chamber of Commerce, said that “public confidence” remains a major obstacle in developing the country’s stock market.

“In my point of view, the idea of the stock exchange is still new here, and it needs at least another three years to promote public awareness about the market,” he told Xinhua. “People are reluctant to invest their money in something that they have no knowledge about.”

Svay Hay, chairman of the broker Acleda Securities Plc, said the CSX is currently well-equipped with high technologies, laws and regulations, and market intermediaries.

“I think that the market has everything in place, but the challenges are no listing companies and poor knowledge among the public,” he told Xinhua. “The market sees slow progress in its first year of operations because there is only one issuer — the PPWSA — so the trading action is limited as investors have no option.”

The PPWSA sold 13 million shares in its first IPOs (Initial Public Offerings) in last April with a share going for 6,300 riel (1.57 U.S. dollars).

In May, the highest-priced stock was about 2.55 U.S. dollars a share, and then, it had gradually lowered to 1.55 U.S. dollars.

On Thursday, the PPWSA’s share price dropped by 4.91 percent to 6,200 riel (1.55 U.S. dollars) per share from 6,520 riel (1.63 U.S. dollars) in previous day. Thursday’s trading volume was only 100 shares worth 620,000 riel (155 U.S. dollars), according to data of the CSX.

Last week, the PPWSA allocated its first dividend to shareholders. According to the firm’s announcement, the dividend payout ratio was seven percent, with a total dividend of 2.4 billion riel (600,000 U.S. dollars), and the dividend per share is 27.7 riel (0.69 cent of U.S. dollar).

Low dividend allocation has discouraged some investors from the market.

Ming Bankosal agreed that the first dividend was very low, but defended that the firm has to keep some portions of the profit for business expansion.

“Normally, shareholders want to get much profit, but the company cannot allocate all the profit to the shareholders, it needs to keep some for business expansion, or it has no capital to expand the company’s business,” he said.

The CSX was initiated by the Korean Exchange in 2007. It is a joint venture between the government of Cambodia holding 55 percent of the stakes and the Korean Exchange owning the remaining 45 percent.

By  Nguon Sovan  |   18 April 2013  |   Xinhua