Myanmar has been short of electricity in the past two years as hydro power plants in the country have not been operating at their full capacity due to water shortages at reservoirs and hydroelectric plants.

According to official statistics, the installed capacity of state-run Myanmar Electric Power Enterprise (MEPE), the main electricity supplier in the country, was only 1248MW as of the end of 1998. In efforts to resolve the power shortage problem, Myanmar signed agreements with two Chinese companies last year to implement three hydro power projects in the Mandalay, Magway and Sagaing areas.