Nam Paw Hydro Power Project

Objectives

Nam Paw Hydro Power Project is a major project in the Company’s current investments. The objectives the Company focuses on the hydro power investment are:

1. to generates job opportunities for the local,
2. to supports local development,
3. to help fulfill the country’s electricity demand, and
4. to generate fair profit for the Company’s shareholders

In other words, the Company has chosen the Hydro Power Project due to high demands of power in the local.

Pre-Feasibility Studies(Pre-Feasibility Studies)

The Pre-Feasibility Studies for the Project had been done by Kunming Engineering Co., Ltd. (KHIDI) since October 10, 2013.

Memorandum of Understanding (MOU)

After the KHIDI had carried out the Pre-Feasibility Studies, according to the procedure, the engagement was reported to the local authorities on October 12, 2013, thereafter to Shan State Government on November 6, in the same year. On October 7, in the following year, the Company was able to sign MOU with the Shan State Government.

Relocation and compensation for the project affected people

After MOU signing with Shan State Government, land compenstions for the project affected people had been paid over amount of 400 millions kyats, under the supervision of the Department of District Land Compensation Appraisal and the Department of Land Survey. Land use permit for an area of 179 acres to use for the project had also been granted by the Central Committee for the Management of Vacant, Fallow and Virgin Lands on April 4, 2016.

Drawing design for the relocation of Tar Lone bridge (upper Nam Paw), Tar Long temple, and a police camp which fall in the flood area of the project had been submitted to the related Ministry departments for the approval.

Myanmar Electricity Law

Although the Company had signed MOU with the Shan State Government, there was still unfortunate circumstance that hindered the progress of the project development. That is, 20 days after MOU signing, Myanmar Electricity Law was promulgated, on October 27, 2014. The new Electricity Law rules that in power production, the power plant with the installed capacity less than 10MW is the small size, between 10MW and 30 MW is the medium size, and over 30 MW is the large size power plant. Under the same law at section 4, the 9th Article rules that for the medium size power plant to connect to the national grid, it is necessary to get permit from Union Government. For the Company needs to connect to national power grid, we therefore had to make preparation to get permit from the Union Government again. This process took and delayed the Company as long as nine months in the Hydro Power Project development.

Feasibility Study (FS)

Developing a hydro power plant is by no means an easy job. All related factors such as geology, topography, environment etc., etc., have to be thoroughly and systematically studied and assessed. After all related factors have been systematically studied, then designing and estimation works come along. As far as hydro power is concerned, some services are not available in Myanmar. For such concerns, the Company has to hire foreign technicians or use services from abroad.

For the Project’s feasibility studies, including design and design supervision, the Company uses service from Hunan Hydro Power Design Institute (HHPDI) from China. The contractual agreement had been signed on November 2, 2014.

Environmental and Social Impact Assessment (EIA & SIA)

Even though the feasibility study states that the business is viable, it has to be assessed next level that if the project has negative impact on social and environment; if it does, to what extent and what resolution the Company has to mitigate the impact. For the environmental and social impact assessment service, the Company had sign a service contractual agreement with the Myanmar Sustainable Development of Engineering Service, (MSDES) on April 25, 2015. Thereafter, the MSDES started working according to its procedure.

Dam Breaking Analysis

It is crucial that the Nam Paw Hydro Power Project in which the Company invested is up to international standard in terms of quality ensuring the dam has the capacity to withstand in worse natural conditions. Only then it will benefit the Company as well as the social and environment. To achieve the required quality for the hydro dam, the Company entrusted the task of dam breaking analysis to SYDRO Consult, a well-known Germany based company which has long experience and expertise in hydro dam. For the aforementioned service, the Company had signed a service contract with SYDRO Consult on November 18, 2015. Such dam breaking analysis, be it a crucial subject, it is still uncommon among the hydro dams built in Myanmar.

For the aforementioned analysis service, Dr. Hubert Lohr, an expert from SYDRO Consult, made trips to the project location as well as downstream area twice to collect necessary data and assess the real situation. Moreover, to mitigate possible loss in severe flood condition, on the second trip, the expert, by cooperating with MSDES and the GHK, was able to conduct a Stakeholders Meeting discussing Emergency Preparedness Plan (EPP) for two consecutive days, on July 1-2, 2015, in which the local task forces and villages administration body actively participated and discussed their opinions.

Memorandum of Agreement (MOA)

The Company, after long and painstaking preparation, was able to sign the Memorandum of Agreement for the project with the Union Government, by way of BOT (Build-Operate-Transfer) on March 16, 2016. Based on the signed MOA, the BOT is structured for 50 years for the Company to operate, but extendable twice for 10 years on each extension (together make it 70 years).

Land Use Permit

The Company had applied for the land use permit for 179-acre within the project area, situated between Man Mai village tract and Se Lant Village tract, to the Central Committee for the Management of Vacant, Fallow, and Virgin Land. The land use permit with 30-year validity (from 2016 to 2046) was granted on April 4, 2016, by the Committee’s meeting held on March 4, 2016.

Investment Permit from Myanmar Investment Commission (MIC)

The Company had applied for investment permit for Nam Paw Hydro Project to Myanmar Investment Commission (MIC) on December 5, 2016. In the Commission’s regular Proposal Assessment Team (PAT) meeting (46/2016) on December 12, 2016, the Company was called for, and given necessary directions, and instructions.

The Company then re-submitted the application for investment permit according to the instructions given by the Commission. The permit for the investment of 48-billion MMK and 14.308-million USD for the Nam Paw Hydro Power Project was approved by the (7/2017) PAT meeting on April 28, 2017. The Investment Permit (MaNaTha-1249/2017) for Nam Paw Hydro Power Project was issued on May 25, 2017.