The Thai developer of the multi-billion-dollar Dawei economic zone in Myanmar plans to spend an initial $300 million in 2013 on developing the project after receiving support from the Thai and Myanmar governments, an executive said on Monday.
The amount will be used for the relocation of local people, as well as utilities, roads and a port before a special purpose vehicle (SPV) is set up at the end of this year, said Premchai Karnasuta, President of Italian-Thai Development Pcl.
“After the governments’ agreement about setting up the SPV, there is more confidence in the project. For Italian-Thai, the situation has improved,” Premchai told reporters.
Italian-Thai, Thailand’s largest construction firm, has struggled to find the $8.5 billion needed to finance infrastructure and utilities under the first phase.
The $50 billion, 250 sq km (100 sq mile) complex was planned to include a deep-sea port, steel mills, refineries, a petrochemical complex and power plants.
Under the new structure, the Myanmar and Thai governments will each hold 30 percent in the SPV, while the remaining 40 percent will be held by other partners including Japan, China and South Korea, Premchai said.
Italian-Thai will be shareholders of eight companies receiving rights from the SPV to manage projects including a port, roads, power plants, water and industrial park with a holding of 25 percent.
The Thai developer will use liquefied natural gas (LNG) as the fuel for a new 280 megawatt (MW) power station and plans to sign a memorandum of understanding next week to buy 3 million tonnes a year of LNG, he said.
The supplier was keen to jointly invest in a new LNG receiving terminal to be built at Dawei, he said, declining to name the potential partner.
In the longer term, the capacity of the power plants in Dawei will be increased to 8,200 MW, of which 1,000 MW will come from natural gas and 7,200 MW coal, and the T
hai government wanted to export 4,200 MW to Thailand, Premchai said.
Myanmar’s government vetoed plans for a 4,000 MW coal-fired plant a year ago. The Thai authorities have since spoken of the possibility of using clean coal technology.
While waiting for the SPV to be set up, Italian-Thai will spend about $300 million on the project and has received financial support from local banks including Siam Commercial Bank, Kasikornbank, Bangkok Bank and Krung Thai Bank.
Premchai also expected Japanese financial institutions to support the project.