SN Power is aiming to play a key role in developing Asia
Global power developer with more than a hundred years of experience is aiming to play a key role in developing Southeast Asia
In 2002, two Norwegian state entities joined hands to establish a xhydropower company that would eventually become an international player a mandate to contribute to economic growth and sustainable development in emerging markets. Statkraft Norfund Power Invest AS (SN Power) was a 50/50 joint venture between Statkraft and Norfund (Norwegian Investment Fund for Developing Countries), which even in its first few years of operations managed to enter Sri Lanka, Peru, India, Chile, Nepal and the Philippines in rapid succession. Although it is looking at other renewables as well, when it was decided that the company would stretch outside of the Nordic region, it would bank on its core competence, hydropower, which currently makes up 19% of the global electricity supply and nearly 98% in Norway. In 2013, Statkraft and Norfund signed an agreement to restructure and prolong their cooperation within the renewable energy sector, creating a new company, SN Power AS, with a focus exclusively on developments in Southeast Asia, Africa and Central America.
Jan Cederwall, Country Director, Myanmar, draws upon 25 years of power development expertise ins Southeast Asia, having developed gas, coal and hydropower projects for SN Power and its predecessors Nordic Power Invest and Nordic Hydropower. “This entire Southeast Asian region needs power. It’s growing very quickly and electrification is still at a very low level. We know that power is a key element in the development in any country, and currently only 1/3 of the population in Myanmar has access to it. There is a lot of untapped potential here,” Mr Cederwall said. He is quick to point out how crucial it is to develop projects in a sustainable way, not driving people off their lands and destroying natural habitats. All the projects that are being considered need to satisfy a variety of technical, ecological, social and financial criteria, and play an overall part in developing the host country. “Identifying projects is a long and careful process. There have to be certain natural elements present, such as rivers and mountains with enough water flowing downstream; that’s the starting point. If you look at a map of Southeast Asia, the centre part is largely flat. The mountains, creating a horse shoe around Thailand, are in Laos, Myanmar and Vietnam, and these countries have a lot of hydropower to harness.” Once a potential site is confirmed, the next phase will deal with identifying what impact the project may have on the surrounding flora and fauna, not to mention the local communities. If there will be an impact, is there a way that SN Power can mitigate it, or will the project do more harm than it’s worth? This study phase will typically take anywhere between 2-5 years. Working in a country like Myanmar can be extremely challenging at times and take a certain leap of faith as the country is going through decades’ worth of changes in a matter of years, which means that predictability becomes of the utmost importance. That being said, there is no “preset formula”. Each project is unique in its own ways. SN Power builds on Statkraft’s more than a hundred years of developing hydropower and the partners are chosen to in one way or another compliment that knowledge. “The most feasible way to work in a fast developing countries is to try and partner with governments. In Laos we’ve managed to do just that and we’re trying for a similar setup in Myanmar. These investments are huge and their impact is also considerable, so it makes sense to have them as a partner. If the rules and regulations suddenly change, we can stand to lose a lot of money.” Therefore, having a very close, interactive dialogue with the host government is one of the key ingredients of a successful project. However, Myanmar has an inherent need to develop power and they need to do it on their own terms, but Cederwall says that it’s always good for the government, too, to have a strong partner with relevant experience to consult with. As such, this symbiosis achieves a measure of predictability and risk mitigation for both sides. As of now, SN Power has signed a memorandum of understanding with the government of Myanmar for its first power plant in the country, called Middle Yeywa. It’s located on the Myitnge (Nam Tu) river, upstream of the operating 790 MW Yeywa Hydropower station, in Shan State. The prefeasibility findings show that the project “appears to be technically, socially and environmentally viable”, and estimated to deliver approximately 3.2 TWh annually. This inherent need to quickly ramp up power supplies in the country to match the fast pace of development can create a situation where foreign companies will try to pitch and win projects, regardless of the impacts they will have.
There are several power projects in Myanmar that have received strong criticism in the media, mostly due to their lack of communicating with local communities, something that he considers absolutely essential. Indeed, even the Middle Yeywa project has had its nay-sayers in the press, but for slightly different reasons. “Some people are saying that we shouldn’t go to Shan state before there is peace there, but the way we see it is that if you let the difference in development between Shan and neighbouring states become too great, it will only add to the social tension. Having electricity and the business environment that will naturally grow around it is to benefit all people in
the area, regardless of where they come from or what their ethnicity may be.” The business environment that Mr Cederwall is talking about comes in the form of job creation, business and infrastructure. “In our negotiations with the Shan state, they are actually very welcoming of the project since they understand that we’re bringing business there, which will spur further growth and development.
Social and environmental problems are extremely important for us and we would never build a project without having a social license to do so, we need to make sure the people are cared for, but also to have a platform to disagree with one aspect or another. Perhaps our biggest strengths, as a company, is that we’re always working with local communities.” In some cases, where some mitigation of negative effects has to occur for the project to move forward, the cost of building new housing, roads, clinics, schools are all factored in the framework. Once the construction of the plant is finished, these structures will remain there to be taken over and run by the local communities. “We’re aiming to bring much more than merely power to the people. They still need to eat, somewhere to stay, clothes on their back. In Laos for example, there’s a 5,000 people strong village outside of the plant. It didn’t exist before we built the plant.” Of his plans for Myanmar, Mr Cederwall remains optimistic for the country as a whole but recognises the challenges ahead. The country is still full of fractions and uniting them will take time, dedication and a whole lot of hard work. “When we started in Laos two decades ago, we were working on the first privately financed hydropower project in the country. We’re now among the first comers in Myanmar. Will we ultimately be successful? Check back in 10 years.
Upper Left: Middle Yeywa on the Myitnge (Nam Tu) river is SN Power’s first project in Myanmar. Above: Mr Jan Cederwall, SN Power’s Country Director for Myanmar. PHOTO: SN POWER/JAN CEDERWALL