World Bank to support electricity access

Power to the people: that’s the goal of a World Bank team that visited Myanmar last week. The team said energy infrastructure development would be at the core of its program to expand the country’s economy, create jobs and reduce poverty through accelerated reforms.

“Connecting people and businesses to a reliable electricity grid is critical for Myanmar to realise its enormous social and economic potential,” Mr Jin-Yong Cai, the executive vice president and chief executive officer of the World Bank’s International Finance Corporation (IFC), told a press conference in Yangon on February 5.


Improvements in the banking and communications also form part of the plan.“IFC is working with the government to establish a strategy that will promote investment in the power industry and help deliver electricity in a reliable and sustainable way to all citizens,” said Mr Cai.

The World Bank is providing Myanmar with US$165 million in zero-interest loans for its priority needs. This is in addition to an $80-million grant for community-driven development that will enable villagers to improve schools, clinics, roads and water supply.World Bank East Asia and the Pacific vice president Mr Axel van Trotsenburg said: “I took up my position on February 1 and I decided my first trip would be to Myanmar, for two reasons: first of all, the World Bank wants poverty reduction in this country. Secondly, the developments in Myanmar have been remarkable and there is now a complete new reengagement with the World Bank.”

He said the first phase of the World Bank’s reengagement with Myanmar had recently been concluded with the debt arrears clearance.

“So we can now really start thinking of normal programs. We’ve decided to commit about $700 million over a 20-month period, of which we had already committed $520 million,” said Mr van Trotsenburg.

The World Bank said improving electricity supply was a strategic development priority that required large investments from both the public and private sectors in a country where only one in four people have access to reliable electricity.“Turning on the lights in Myanmar will enable children to read at night, and encourage villagers to start new businesses that will lead to growth and jobs. Sufficient, reliable and affordable electricity will help relieve poverty in rural areas and create opportunities for all,” Mr van Trotsenburg said.

The World Bank’s recent East Asia and Pacific Economic Update shows Myanmar’s economy continued to accelerate in fiscal year 2011-12 with gross domestic product growth at 5.5 percent. Growth is expected to reach 6.3pc in 2012-13.

The World Bank said electricity demand was also growing fast, with current supply 30pc or more below demand. Myanmar should embark on strategic power sector reform to ensure sustainable access to electricity, which will be important to attract investment, it said.  “We started with community-driven development in the villages. They know how we can help them. People are hoping for some financial support so that they can make a difference in their communities for the children, job creation and health clinics,” said Mr van Trotsenburg.

The World Bank is to develop projects in the electricity sector that will provide about 120 megawatts more electrical capacity, especially in rural areas.

“This is important because it will result in five million people having regular electricity. In the medium and longer term it will support health, education and infrastructure,” he told The Myanmar Times.

“Access to infrastructure and to finance holds the key to economic development,” said IFC Asia Pacific vice president Karin Finkelston.“Mobile phone connections, ports and power lines create jobs and link people to markets, enabling the flow of goods and services. IFC is also working with ACLEDA Bank to bring sustainable microfinance to the people in Myanmar.”IFC, the part of the World Bank Group focused on private sector development in emerging markets, has invested $2 million in ACLEDA Bank to help set up a new microfinance institution in Myanmar. It aims to provide loans to more than 200,000 people – mostly micro- and small businesses run by women – by 2020.IFC also recently co-published the study Microfinance in Myanmar – Sector Assessment highlighting the need to build up the sector quickly, as demand for microfinance is four times higher than supply. IFC is also working with the government and chambers of commerce to support the establishment of a business forum aimed at improving the business climate in the country.The World Bank Group delegation met President U Thein Sein, government ministers, members of parliament – including Daw Aung San Suu Kyi – as well as representatives of the private sector, civil society, academic and development institutions. Discussions focused on how the World Bank Group can support reforms aimed at improving the lives of all the people in Myanmar, especially the poor and vulnerable. “The World Bank cares about all the citizens of this country. We hope all citizens can have a secure and peaceful life,” said Mr van Trotsenburg.

source: The Myanmar Times
http://www.mmtimes.com/index.php/business/4062-world-bank-to-support-electricity-access.html