In March 2005, Burma’s Ministry of Electric Power (MEPE), along with financial and construction support from Chinese companies, completed the Lower Paunglaung Dam on the Paunglaung River, which flows through Shan State before joining the Sittaung River in Mandalay Division.The Upper Paunglaung Dam is currently under construction and is expected to be complete in 2012. Both dams will power Burma’s new capital of Nay Pyi Taw.
Companies Involved The Lower Paunglaung Dam was jointly built by MEPE and the Yunnan Machinery Equipment Import & Export Company Limited (YMEC). The Export-Import Bank of China (China Exim Bank) provided an over 120 million USD loan for the project. Sinohydro also provided construction materials and support.
Construction and design of the Upper Paunglaung Dam is being overseen by Swiss company AF Colenco which is a part of the AF Group based in Sweden. The Yunnan Machinery Export Company has agreed to provide machinery and equipment while a British and German firm are also involved in the project.
Chinese Yunnan Machinery Equipment Import & Export Company Limited (YMEC) Export-Import Bank of China (China Exim Bank) Sinohydro Corporation
Swiss ÅF-Colenco of the ÅF Group based in Sweden
British Malcolm Dunstan and Associates German FOSCE Consulting Engineers
Finance Investment in the Lower Paunglaung Dam amounted to nearly 300 million USD. China Exim Bank provided a loan of over 120 million USD, while YMEC provided machinery and equipment under a 160 million USD contract.
YMEC has agreed to provide machinery and equipment for the Upper Paunglaung Dam under an 80 million USD contract.
Electricity – where will it go? Most of the electricity from the Lower Paunglaung Dam is currently being sent to Burma’s new capital, Naypyidaw. Electricity from the Upper Paunglaung Dam is also expected to go to Naypyidaw. Local residents have not received electricity from the Lower Paunglaung Dam, and do not expect to receive electricity from the Upper Paunglaung Dam once it is completed.
Project Status - Last updated May 2011 The Lower Paunglaung Dam was completed in 2005, and is currently in operation. Preparation for construction of the Upper Paunglaung Dam began in 2004. It is currently about 60% finished and is expected to be complete in 2012.
Impacts The dam’s 61 square kilometer reservoir will flood the entire Paunglaung valley which is home to 23 villages, or 8,000 people, who are mainly Kayan, Pa-Oh, and Burmese. The valley is the only fertile plain in the area. The local agricultural economy will be destroyed and as people are forced up the mountains to establish new settlements forests will be impacted. Logging has already increased in the area. Forced labor to service Burma Army battalions sent to secure the Upper Paunglaung Dam, as well as tight restrictions on the local population, have been ongoing since 2004. Workers toiling at the construction site are paid a mere US$30 per month and are often paid late.
Due to the height of the dam, the forests along Paunglaung River will be submerged and the animals and their grazing grounds will be submerged. Wild animals such as deer, bears and turtles will lose their habitat. The dam will also decrease the number and variety of fish species, affecting local food security for thousands who rely on fishing to supplement their diet and incomes.
