World Bank Provides $140 Million Loan for Burma’s Electricity

By Kyaw Hsu Mon 25 September 2013

RANGOON — Back in Burma after a 20-year absence, the World Bank has approved an interest-free US$140 millions loan to fund a power plant in Mon State, the bank’s first international investment project in the country since re-engaging last year.

Kanthan Shankar, the World Bank country manager in Burma, said a monitoring team would ensure that the funds supported the country’s electricity supply, as more than 70 percent of the population currently lacks access to power.

The gas turbine plant in Thaton Township, a four-hour drive from Rangoon, will have a capacity of 106 megawatts of electricity, covering half the peak demand in Mon State and 5 percent of peak demand in the country, the World Bank said.

“Burma’s per capita energy consumption level is one of the lowest in the world, with fewer than 30 percent of its people having access to electricity, and only 16 percent in rural areas,” Shankan said.

“We have a team here to monitor the progress of the project, and to conduct a financial audit of where the money goes. The responsibility is the government’s, but we will monitor them.”

The Ministry of Electric Power will receive the 40-year loan, of which $130 will go toward the establishment of the plant and $10 million toward technical support.

The natural gas-fired plant will improve access to reliable electricity in Mon State as well as Rangoon Division and the Irrawaddy delta area. It is intended to support Burma’s goal of providing universal access to electricity by 2030.

The World Bank expects to call for tenders for the project next month.

Due to decades of underinvestment in electricity infrastructure, 80 percent of Burma’s rural population lacks access to electricity, while 77 percent of the total population—including in urban areas—lacks access, according to statistics from the Mekong Energy and Ecology Network.

Many families in rural areas collect firewood for cooking, with the average five-person family gathering 2.5 tons of wood annually, according to Global Environmental Institute-China, an independent environmental nonprofit, which said the time and cost of collecting the wood was significant for families and that the practice was detrimental to the environment.

According to figures from the Rangoon Electricity Supply Board, Burma as a whole uses 1,500 megawatts of electricity annually, of which Rangoon consumes 720 megawatts.

The World Bank started work with Burma in 1952 and pulled out in the 1990s, under the country’s former military regime. The loan for the power plant follows an $80 million grant for a national community-led development project last year that was designed to help 3.6 million people in rural communities.