The huge amount of money needed for the government to supply electricity to the whole of Myanmar for 2017/2018 means that they are supplying this vital resource at a loss.
An amount of K300 billion is needed by the government to supply the electricity across the country, but according to U Myint Oo, the deputy director general of the Electricity and Energy Ministry’s Department of Electric Power, the government doesn’t have the funds.
Supplying at a loss
As the government is still committed to supplying the energy, they will be set to lose K23 per unit of electricity. The Ministry also reported that Myanmar needs 3100 MW (megawatts) of power for the financial year of 2017/2018.
This financial year, the government has reported an income of K1.164 trillion from the distribution of power. The expenditure will reach K1.541 trillion, meaning the ministry will be at a loss of K376.64 billion.
In the last fiscal year, the government lost K337 billion in the transmission of electricity. The government has had to invest in distribution and transmission costs as well as the cost of production. This has decreased the state budget that had been allocated towards expanding power plants, substations and electricity grids.
Household electricity prices
At the moment, households pay across a range of K35 to K50 per unit of electricity, and industrial users pay between K75 and K150 per unit. Ministers explained that private and state-owned power plants provide electricity costing about K91.92 per unit.
However, income from collecting electricity charges came to an average of K69.26 per unit, meaning that the state’s budget lost K22.66 for every unit. This amounts to a loss of K337 billion for the financial year of 2016/2017.
For the future, the World Bank is working with Myanmar’s government to put together an electricity tariff plan that will develop its electricity sector, set appropriate prices and reduce losses.