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11 Dec, 2013

First ADB US$60m Loan to Myanmar to Grow Nationwide Electricity Grid


09 December 2013, ADB media release – Some 480,000 households in four regions in Myanmar will have better access to a more reliable supply of electricity to support their daily activities with a $60 million loan from the Asian Development Bank (ADB), the first project loan since re-engaging with Myanmar, which will rehabilitate sections of the country’s power distribution network.

“Access to electricity is crucial to development. Repairing and strengthening existing electricity infrastructure will help reduce system losses, use resources more efficiently and connect more people to the electricity grid more quickly,” said ADB Vice President Stephen Groff.

Technical and non-technical losses from Myanmar’s aging distribution system were as high as 18.2% in 2012, meaning almost a fifth of all power generated was lost before reaching customers. ADB’s loan will fund rehabilitation works to carry electricity more efficiently, including upgrading of existing 66/11 kilovolt (kV) and 33/11 kV substations, replacing existing 33 kV and 11 kV distribution lines, replacing existing 11/0.4 kV transformers, and upgrading to digital revenue meters. The loan will also replace tangled knots of existing bare low voltage distribution lines with more efficient aerial-bundled conductor lines. The project will reduce distribution loss by 4 percentage points.

Improving distribution in Yangon, Mandalay, Sagaing, and Magway regions should reduce system losses and subsequently provide increased opportunities for large industries and small and medium-sized enterprises to expand their services, enhance living conditions, and improve services at community facilities like clinics or schools, which should contribute to economic growth and poverty reduction.

The country’s average electrification ratio has increased, growing from 16% in 2006 to 28% in 2012. Yangon City has the highest ratio at 72%, followed by Nay Pyi Taw at 65% and Mandalay at 35%. Only about one in five rural households are connected to the electricity grid.

In addition to providing support for transmission updates and preventing technical losses, ADB is working with the National Energy Management Committee to improve coordination between ministries responsible for the country’s energy. ADB is also assisting the government in preparing Myanmar energy sector policy, revising the Electricity Law, setting the national transmission and distribution code, and establishing electric equipment standards. A 20-year, long-term energy master plan is also being formulated.

Future activities in the energy sector will also focus on promoting off-grid rural energy access and helping the government establish the public-private partnerships needed to raise the financing for power system expansion.

ADB, together with the World Economic Forum and Accenture, has also conducted a rigorous assessment of the nation’s current energy architecture challenges. A report providing an overview of a path to a “New Energy Architecture” was published in June 2013.

Under the ADB interim partnership strategy for Myanmar 2012-2014, ADB is also helping to improve the government’s management of the economy, encourage growth of small and medium enterprises, strengthen secondary education and vocational training, improve highways to neighboring countries, expand irrigation networks, and improve water supply, sanitation, and other services in key cities and towns.