UREC Energy International Limited provides $89.2 million buyer’s credit loan for Phase 1 of 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project

UREC Energy International Limited provides $89.2 million buyer’s credit loan for Phase 1 of 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project On September 22, 2014, U-Energy Thaketa Power Company Limited (also known as U-Energy Thaketa Power Co.

Ltd. and U Energy Thaketa Power Company Limited) — a joint venture of Department of Electric Power Planning (DEPP) under Myanmar’s Ministry of Power [3% equity stake] and UREC Energy International Limited [97% equity stake] — signed a joint venture agreement for the 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project.

Then, on November 14, 2014, Myanmar’s Ministry of Electricity and Energy and Union Resources and Engineering Co., Ltd (UREC) signed a memorandum of agreement (MOA) regarding the 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project.

On September 22, 2015, U-Energy Thaketa Power Company Limited signed a Build-Operate-Transfer (BOT) contract with the Government of Myanmar for the 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project.

U-Energy Thaketa Power Company Limited was granted a 30-year concession to build, operate, and transfer the 489MW Thaketa Gas-fired Combined Cycle Power Plant.

Approximately six months later, on March 20, 2016, Myanmar’s Electric Power Generation Enterprise and U-Energy Thaketa Power Company Limited signed a Power Purchase Agreement (PPA) and Land Lease Agreement (LLA) for the 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project.

The purpose of the project is to construct a 489 combined cycle power plant in Thaketa township, 16 km east of Yangon and 25.6 km away from the Thilawa Special Economic Zone. The project is being implemented in two phases: 106MW for Phase 1 and 380MW for Phase 2. The total cost of Phase 1 is $129 million.

In 2016, UREC Energy International Limited — a subsidiary of Union Resources & Engineering Co., Ltd. (a Chinese state-owned enterprise) that is legally incorporated in Hong Kong — signed a $89,282,000 facility agreement with U-Energy Thaketa Power Company Limited for Phase 1 of the 489MW Thaketa Gas-fired Combined Cycle Power Plant Construction Project.

The loan was supported three credit enhancements: (1) a repayment guarantee from UREC Energy International Co.

Ltd.; (2) a Sinosure credit insurance policy; and (3) a project revenue (“collection”) account at the Yangon Branch of ICBC with a minimum cash balance (“debt service reserve amount”) requirement.

The borrower was expected to use the loan proceeds to partially finance a $100,315,695 EPC contract that it signed with SEPCO3 (Shandong Electric Power Construction Corporation III or SEPCO III) on March 30, 2016.

China Development Bank reportedly issued a $100 million buyer’s credit loan to U-Energy Thaketa Power Company Limited to support the implementation of Phase 1. A sub-sovereign guarantee was reportedly issued by the Ministry of Electricity of Myanmar in support of the loan. The borrower also purchased a credit insurance policy from Sinosure.

The borrower was expected to use the proceeds of the loan to partially finance a $100,315,695 EPC contract with SEPCO3 (Shandong Electric Power Construction Corporation III or SEPCO III), which was signed on March 30, 2016. SEPCO3 was the EPC contractor responsible for project implementation. The project officially commenced on May 12, 2016.

Civil works excavation began on December 9, 2016. The power plant successfully achieved reverse power transmission on October 9, 2017. The power plant’s turbine generator was connected to the national grid on January 6, 2018. The project was officially reached completion on March 17, 2018. A final acceptance certificate (FAC) was issued on March 23, 2020.

Upon completion, Phase 1 was expected to meet the electricity needs of more than 42,000 households.