- By Aung Shin | Sunday, 29 September 2013
The World Bank announced a US$140 million low-interest loan to fund a power plant in Mon State, the first domestic investment from the institution since a January deal allowing cleared arrears stemming from 1989.
The 106 megawatt gas turbine power plant will replace an existing generating facility, producing 2.5 times the electricity with the same amount of fuel, it said.
"It's the first international investment since the World Bank's re-engagement in Myanmar and a critical declaration of the World Bank's commitment to support the development of Myanmar," said World Bank Myanmar country manager Kanthan Shankar on September 25.
The World Bank said the project will meet 5 percent of Myanmar's peak demand and 50pc of the state's demand. The 106MW facility will replace existing turbines able to generate 40MW.
Myanmar will pay a 0.75pc service charge over the 40-year term of the otherwise interest-free loan.
Myanmar had stopped making payments on its debt to the World Bank and the Asian Development Bank (ADB) in 1989, resulting in a suspension of lending to the country. However, a deal struck in January 2013 with the Japan Bank for International Cooperation allowed for a bridge loan to repay arrears and allow lending from the World Bank and ADB to begin again to the country.
World Bank East Asia Pacific vice president Axel van Trotsenburg said in a release the bank could provide financing, analysis and advice to Myanmar's energy sector.
"We are also working to leverage private sector investment in power generation and distribution," he said.
"Myanmar's transition has tremendous potential to reduce poverty. A more reliable electricity supply will create jobs and improve lives," said Mr Shankar.
Meanwhile, the ADB announced a $2.85 million grant to assist Myanmar with developing a long-term energy plan and improving its power grid in a release on September 26.
Jong-Inn Kim, lead energy specialist at ADB's Southeast Asia Department, said a master plan will help the country assess its energy needs and provide a roadmap to meet them.
The grant funding comes from the Japan Fund for Poverty Relief, the release said. The ADB had similarly halted lending to Myanmar following the country's 1989 decision to halt loan repayments.
