$171 Million ADB Loan to Help Expand Electricity Access in Myanmar

New Delhi: The Asian Development Bank (ADB) has approved a $171.27 million loan to help Myanmar construct 44 medium-voltage substations and 1,006 kilometers of distribution lines across Kayin state and the Ayeyarwady, east Bago, and Magway regions.

The Accelerated Rural Electrification Project will expand the electric grid to enable electrification of 400,300 households in 2,815 villages. It will also set up Myanmar’s first computerized distribution automation system, which will optimize power distribution through real-time monitoring and the management of network faults.

The project includes a $1 million technical assistance grant to help the Ministry of Electricity and Energy and the Electricity Supply Enterprise develop recruitment tools to boost the share of women working at both the township and village levels.

“The project will help the government provide stable and reliable electricity in rural areas, supporting inclusive economic growth, creating jobs, and contributing to Myanmar’s aspiration of achieving universal electricity access by 2030,” said ADB Principal Energy Economist Duy-Thanh Bui. “The project will also lessen the economic and social impacts of the coronavirus disease (COVID-19) pandemic by improving people’s access to healthcare, education, and job opportunities.”

Myanmar’s economy grew at an average annual rate of 6.4% from 2015–2019, buoyed by the growth of manufacturing, construction, tourism, and services sectors, as well as increased foreign investment. The COVID-19 pandemic is threatening to slow down the progress. ADB forecasts a 1.8% growth rate for Myanmar in 2020.

In response to the pandemic, the government is implementing a comprehensive socio-economic assistance program. Reliable, affordable electricity supply plays a critical role in creating jobs,  promoting investment, and improving human capital to accelerate the country’s economic recovery.

The project areas have higher poverty and lower electrification rates than the national average. The poverty rate in Magway was 35.6% in 2017, compared with the national average of 24.8%. Just 17.0% of Ayeyarwady’s households have access to the electric grid, compared with the national average of 49.0%. The project will help supply more than 310 gigawatt-hours of electricity from the grid, enough to support basic power consumption by target beneficiaries. It will also expand the electric grid to thousands of schools, clinics, hospitals, and libraries.

Since 2012, ADB has provided more than $500 million in loans and technical assistance to support Myanmar’s energy sector, including the government’s energy policy reforms and infrastructure development. ADB’s sovereign lending has focused on transmission and distribution infrastructure, and ADB’s nonsovereign investments and services have financed efforts to boost the country’s generation capacity. ADB also provided technical assistance in regional cooperation on issues such as electricity grid code harmonization and cross-border power trade.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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