The development of Myanmar’s energy sector will be financed by public and private sector investment, for which the World Bank has promised support.
by Ju Li Khing
According to The Irrawaddy on February 6, the World Bank will be providing $165 million in zero-interest loans to support the power sector in Myanmar, along with other priority areas like government investment and peace process projects. The bank’s Multilateral Investment Guarantee Agency will also provide risk guarantees to investors in order to achieve competitive financing rates and accelerate project implementation.
An Asian Development Bank’s October 2012 assessment of the energy sector in Myanmar reported on the country’s abundant hydropower potential, with 92 potential large hydropower projects already identified.
Myanmar is also a major oil and natural gas energy exporter in the region. However, most households in the country still rely on the region’s timber as a primary source of energy, with access to reliable electricity limited to 25 per cent of the population.
In late January, foreign lenders had decided to cancel almost 50 per cent of Myanmar’s total foreign debt (approximately $6 billion).
Furthermore, the World Bank and the Asian Development Bank, which has not provided loans or technical assistance since the 1980s, also restructured more than $900 million of Myanmar’s debt, allowing the government to resume borrowing money from the two organisations. This increasingly positive attention has been attributed to Myanmar’s government reforms for the past two years.
The World Bank has projected Myanmar’s GDP growth this year to be 6.3 per cent, an increase from its 5.5 per cent growth in 2012.