Equipment from Chinese-owned VPower plant in Kyaukphyu to be fully relocated amid growing conflict

By Admin 22 Feb 2026

DMG Newsroom

22 February 2026, Kyaukphyu

The relocation of equipment from the VPower power plant in Kyaukphyu Township, a joint venture between Chinese state-owned CNTIC and Hong Kong-based VPower Group, is nearing completion amid escalating tensions in Arakan State.

The process of moving equipment began in late 2024, initially through cargo ships, but has accelerated significantly following the recent outbreak of fighting near Kyaukphyu.

"The relocation was expedited after the fighting erupted in Kyaukphyu. Over 90 generators have been moved so far, and the remaining equipment is expected to be completely relocated before Thingyan," a local resident with knowledge of the plant’s operations told DMG.

Valued at over US$140 million, the plant was designed to produce 150 megawatts (MW) of electricity using natural gas. However, it has struggled to produce even 60 MW due to chronic gas shortages.

Under the original agreement, Myanmar provided the land and natural gas, while the Chinese side supplied the machinery and technology. The Myanmar government then repurchased the electricity in US dollars for distribution to the national grid.

Located in Gonechwein Village, about six miles west of Kyaukphyu, the plant has faced security concerns since clashes between the military junta and the Arakan Army (AA) in June 2025, which took place just two miles from the facility.

"The rapid pace of the relocation may be due to the unpredictable escalation of conflict in Kyaukphyu. It’s possible they are dismantling the plant as quickly as possible to prevent damage from the fighting," another Kyaukphyu local speculated.

The power plant began operations in late 2020 under the National League for Democracy (NLD) government, with the goal of supplying electricity to the Kyaukphyu Special Economic Zone (SEZ) and the national grid.

However, operations ceased in 2023 after the military regime failed to pay for the electricity in US dollars and failed to provide the necessary natural gas.