Foreign assistance vital in boosting energy in Myanmar
FINANCIAL and technical assistance from international governments and institutions will be as important as foreign direct investment (FDI) in order to boost Myanmar’s power sector development, an energy official has said.
Win Khaing, a member of National Energy Management Committee (NEMC) and president of Myanmar Engineering Society, said at the 6th Myanmar Oil and Gas Exhibition and Conference last Thursday that Myanmar still had to depend largely on international aid due to the lack of infrastructure and technology.
“Our system is about 60 years old, and we lack government funding to ease losses incurred from power distribution. Such losses mostly occur in Yangon due to its very old distribution network and ageing distribution lines. There is no overnight solution for that. Unless we know the problem, we will not have a solution,” he said.
Win Khaing said the NEMC has been working with the Japanese government to solve the problem, adding that the cooperation mainly focused on building control stations for power losses, knowledge sharing, upgrading transformers and efforts to educate people on the proper use of electricity.
The official also underscored the importance of foreign participation in financing for energy sector development.
“The investment required is massive. The government cannot allocate such large sums from the national budget, so we will need to turn to the private sector. In this regard, the government may seek financing and a provision of guarantees under the World Bank [WB] or the Asian Development Bank [ADB],” he said.
Win Khaing said if lenders, multilateral institutions and the donor community got involved, it would improve the “comfort” of private investors, adding that partnership with lenders would also help the government manage risks.
So far, the WB has been the biggest supporter of Myanmar’s power sector. It has approved a US$540-million interest-free loan for two major projects. One is a $400-million project to bring electricity to 1.2 million households, and the other a $140-million project to install a modern, high-efficiency gas turbine 106-megawatt power plant in Thaton, Mon State.
The two projects are part of plans to expand the existing grid by adding medium and low-voltage distribution networks and providing off-grid electrification with solar and mini-grids in rural areas. The WB also backed the national electrification plan in 2014.
The power sector has also won support from the ADB, which provided $2 million for off-grid electricity to 25 villages.
Japan International Cooperation System has also provided $8.7 million for electrifying 25 villages in Chin and Shan States, while Germany’s KfW development bank provided $9 million for improving electricity in Shan State.
According to the Electric Power Ministry, 23,034 of the 64,917 villages in Myanmar have electricity, though by the end of March another 2,308 villages will have power. Myanmar aims to have boost the number of households with electricity to 75 per cent by 2022 and have electricity available to all citizens by 2030.
In its assessment of the energy sector, the ADB noted that the nation’s per capita electricity consumption is the lowest in Asia and most is generated via hydropower. Electricity is available in 67 per cent of Yangon, Myanmar’s commercial hub, while only 16 of rural areas have power.
Yet, Win Khaing foresaw a promising outlook thanks to Myanmar’s abundant resources, namely hydrocarbon, hydropower, coal, renewable energy and biomass. He said that being a latecomer, Myanmar could take advantage by implementing renewable energy sources, plus energy-efficient technologies in industrial applications and energy storage technologies for local grid networks.
