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World Bank approves US$140-million, interest-free loan to boost power in Myanmar

Published on Thursday, 26 September 2013 19:16

The World Bank on Tuesday approved a US$140-million, interest-free loan from the International Development Association (IDA), the Bank’s fund for the poorest nations, to fund a power project in Myanmar.

According to a World Bank press release, the development lender 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’s support for Myanmar’s energy sector.

The project will include the replacement of aging gas turbines with new units, which will produce 250 percent more electricity with the same amount of gas and reduce emissions, marking the first step in the World Bank Group (WBG)’s plan to bring more and cleaner electricity to the people of Myanmar, the statement said.

The announcement follows the bank’s $80-million grant for a national, community-driven, six-year development project designed to help 3.5 million people in rural communities improve infrastructure, as well as analytical work to improve public financial management.

“Delivering reliable energy services to those in need will be essential to end extreme poverty and build shared prosperity,” Axel van Trotsenburg, the bank’s East Asia Pacific Regional vice president, said in the statement.

“We are also working to leverage private sector investments in power generation and distribution,” he added.

Myanmar’s economic growth partially depends on its electrification rate, considered the lowest in the region.

“Myanmar’s transition has tremendous potential to reduce poverty. A more reliable electricity supply will create jobs and improve lives,” said Kanthan Shankar, the bank’s Myanmar country manager.

The project includes refurbishing the Thaton gas turbine station 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.

“As far as I know, the World Bank is trying to observe the public’s needs by direct contact with the local people. Whenever the World Bank is set to fund a project, it observes the targeted areas carefully. Since World Bank officials talked a lot with local people, I think this project will help Mon state to boost its electricity,” a source who has close relations with the World Bank told Eleven Media.

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, according to the World Bank.
“Concerning this project, I heard that World Bank officials met with officials from the Thaton gas turbine station and local representatives. I think there may be further discussions for detailed plans,” Zaw Lin Htun, secretary to the Mon state government, told Eleven Media on Wednesday.

The World Bank initiated a feasible study for the project last year and has already met with local authorities twice so far, according to a high-ranking official in the Mon state government.

“There is no sufficient electricity in Mon state at present. We don’t have enough resources to produce electricity. There are ten townships in Mon state and two of them (namely Chaungsone township and Yaye township) have no access to electricity. Meanwhile, more and more hotels have opened here. So turning the lights on is really important to us. I believe the project will help Mon state to develop more,” a state government spokesperson told Eleven Media on Thursday, requesting anonymity.

Nevertheless, many local people are concerned about the benefits of the project to the area. They are calling for transparency in the use of the fund.

“Whatever organisation gives funding for projects in Mon state, it should be for the good of the local people as well as for the welfare of the state. If not, it will become just a waste of money,” said Zaw Min Oo, who lives in state capital of Mawlamyaing, about a one-hour drive from the plant.

In a phone interview with Eleven Media, Zaw Min Oo said that concerned authorities should transparently inform local residents how the funding will be used. “I think an unbiased organization is needed to observe the implementation of the project,” he said.

In Myanmar, more than 70 percent of the people have no access to electricity and only 16 percent of households have access to grid-based electricity in rural areas, according to a World Bank study.