Turning lights on in Myanmar

Stocks and Financial Services Press Releases Wednesday September 25, 2013 08:53
Washington--25 Sep--World Bank
Efficient low-emissions turbines to bring more, cleaner electricity to the people

Washington, September 24, 2013 –The World Bank will support the installation of a modern, high-efficiency power plant in Mon State, as part of Myanmar’s power expansion plan and the cornerstone of the World Bank Group’s support for Myanmar’s energy sector. The project will replace aging gas turbines with new units, which will produce 250 percent more electricity with the same amount of gas and reduce emissions. The project is the first step to bringing more and cleaner electricity to the people of Myanmar.

The Bank’s Board of Executive Directors approved today a US$140 million interest-free credit from the International Development Association (IDA), the Bank’s fund for the poorest, to fund the project. In Myanmar, where over 70 percent of the people have no access to electricity, turning on the lights is an urgent priority. Replacing existing gas turbines to make them run cleaner, greener and more efficiently is the fastest, cheapest approach to increase electricity production.

Delivering reliable energy services to those in need will be essential to end extreme poverty and build shared prosperity,” said Axel van Trotsenburg, World Bank East Asia Pacific Regional Vice President. “The World Bank Group provides financing, analysis, and advice, bringing good practices from across the globe to Myanmar’s energy sector. We are also working to leverage private sector investments in power generation and distribution.”

Currently, more than a quarter of Myanmar’s people live below the poverty line, and the electrification rate is among the lowest in Southeast Asia. In rural areas, only 16 percent of households have access to grid-based electricity. The project is aligned with the Bank’s strategy in Myanmar, which focuses on delivering quick benefits to communities in support of the government’s people-centered reforms.

“Myanmar’s transition has tremendous potential to reduce poverty. A more reliable electricity supply will create jobs and improve lives,” said Kanthan Shankar, Myanmar country manager. This project will be Myanmar’s first step, with World Bank Group support, to build an efficient and transparent electricity sector that will provide better services, especially in rural areas where the majority of the poor live.”

In the long term, Myanmar will need to develop a mix of diversified energy sources. The World Bank Group is working in close collaboration with Myanmar authorities and other development partners to support Myanmar’s power sector reform and the development and implementation of its power master plan. The Bank expects possible future support in the energy sector to focus on rural electrification, improvements in the regulatory environment, and the operation of the power market. IFC, the Bank Group’s private sector arm, is working to bring private investors into Myanmar’s energy market to help improve efficiency.

World Bank support for the Electric Power Project follows an US $80 million grant for a national community driven development project, designed to help 3.5 million people in rural communities with improvements in infrastructure over six years, as well as analytical work to improve public financial management. The World Bank Group is also working with Myanmar on the preparation of possible future support in priority areas such as telecommunications, water and education.

About the Myanmar Electric Power Project

The Thaton gas turbine station will be refurbished as Myanmar’s first modern 106 MW combined cycle gas turbine power plant, reducing noise and CO2 emissions, and improving the plant’s health and safety standards. The plant will provide electricity to both the national and local grids, covering 5 percent of peak demand in Myanmar and 50 percent of peak demand in Mon State. Technical assistance will help government ministries develop policies and regulation in the power sector.

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