World Bank announces $140m interest-free loan for Myanmar power project
26 September 2013
The World Bank Group (WBG) has announced a $140-million interest-free credit for Myanmar's first modern power plant, proposed to be set up in the Mon state.
The International Development Association (IDA), the soft-lending arm of the World Bank, will provide the funding.
The funding, which will support the installation of a modern, high-efficiency power plant in Mon state, is the first World Bank Group's support for Myanmar's energy sector.
The project will replace ageing gas turbines with new units, which will produce 250 per cent more electricity with the same amount of gas and reduce emissions, a World Bank release said, adding that the project is the first step to bringing more and cleaner electricity to the people of Myanmar.
The project involves 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.
The plant will provide electricity to both the national and local grids, covering 5 per cent of peak demand in Myanmar and 50 per cent of peak demand in Mon state.
The World Bank Group will also provide technical assistance to help ministries develop policies and frame regulations in the power sector.
"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," said Axel van Trotsenburg, World Bank's vice president for East Asia and the Pacific.
It is the first step to bringing more and cleaner electricity to the people of Myanmar. In Myanmar, where more than 70 per cent of the people have no access to electricity, turning on the lights is an urgent priority, the release stated.
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 per cent of households have access to grid-based electricity.
World Bank support for the electric power project follows an $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.