By Joseph Allchin
Thailand’s Gunkul Engineering Plc is looking to invest around $US1.9 billion in Burmese wind farms in the southeast of the country, reports claim, with the majority of electricity to be sold off to Thailand.
The firm hopes to generate around 1,000 MW on sites in Mon, Karen and Tenasserim division. Memorandums of Understanding were signed last month between the Burmese government and the company, which has a significant number of projects already in other electrification-related fields in the country.
Gunkul has reportedly been seeking investors for their wind energy project in which they would maintain a 25 to 30 percent stake. It would then sell stakes of around 10 percent to partners from countries such as Korea and Japan, whilst the Burmese government would also take one tenth.
The Bangkok Post reported that the investment would be “supported by the Asian Development Bank and the World Bank.”
During US Secretary of State Hilary Clinton’s recent visit to Burma, she appeared to open the gates for re-entry into the country by big western-controlled financial institutions such as the World Bank and the International Monetary Fund (IMF). An official from the IMF told DVB last week however that, “The authorities have not requested financial assistance from the Fund.”
Gunkul’s investment would be the most significant sustainable energy venture in Burma, but expectations are high that the country will be deluged with fresh foreign interest, particularly from those who shied away on reputational grounds. This is expected to be largely concentrated in the oil and gas sector, Burma’s most profitable, and which has so far not drawn as much criticism as large dams such as Myitsone in Kachin state, the construction of which was temporarily suspended.
The announcement comes as the Norwegian pension fund took criticism yesterday for its continued investment in Chinese-run oil projects in the country, despite being advised against investment by its own Council of Ethics.
Fears over foreign companies entering Burma centre on the human rights abuses that have become synonymous with large-scale infrastructure projects in the country. This induced the Norwegian Council of Ethics to recommend to its government that it disinvest some $US90 million that Norway’s sovereign wealth fund has invested in PetroChina, which is involved in the dual oil and gas pipelines that are being built in the country.
Campaign group EarthRights International claimed in a December 2010 report that the fund has as much as $US3.7 billion invested in energy companies complicit in human rights abuses in Burma.
However the Norwegian Ministry of Finance rejected the Council of Ethics’ decision because, “The company is not directly involved in the unethical activities.” It added however that, “The Ministry would emphasise that the situation in Burma remains very worrying, and that Norway supports the restrictive measures implemented by the EU.”
The Norwegian sovereign wealth fund was founded on profits from the North Sea oil reserves and is now the second largest such fund in the world, and the largest owner of EU equities.
The Norwegian government however was the chief funder for a ‘Green business’ forum that took place in Naypyidaw in mid November. which included visits by Norway’s Environment Minister, Erik Solheim. and the chair of the Inter-governmental Panel on Climate Change, Rajendra K Paruchuri.