IFC's country manager for Myanmar thinks its electrification targets are challenging

IFC's country manager for Myanmar thinks its electrification targets are
challenging

Vikram Kumar admits public resources are way too meager to meet targets.

In Asia, 700 million people live without electricity. To meet Asia's growing
energy demands, hydropower projects in the Mekong region are developing
fast. In Myanmar alone, hydropower potentials top 100,000 megawatts - the
region's highest. If realized sustainably, the energy produced could benefit
34 million people, or about 66 percent of the population that currently live
without access to electricity. This is coupled with Lao People's Democratic
Republic's energy generation potentials, which could bring electricity to
nearly all rural households by 2020, drive business growth, and generate
income to reduce poverty.

The challenge, however, is to develop this natural resource sustainably.
Asian Power recently caught up with International Finance Corporation's
country manager for Myanmar Vikram Kumar as he discussed where Myanmar is
right now in meeting its targets.

World Bank says Myanmar's hydropower potential is as much as 10GW. What's
been blocking the country from fully harnessing its resources?

Vikram Kumar: Tapping into Myanmar's hydropower potentials requires more
than a flip of a switch. Technical challenges to the sector include issues
surrounding procurement of projects, project allocations, the need for
improved project documentation and tariff structures, among others.

Environmental risks, land use and water rights, coupled with social issues
are of particular concern, which we are addressing through our work.
Additionally, sound policy and regulation will provide Myanmar with the
foundation it needs to sustainably harness its water resources. That's one
reason IFC is here to help.

In September 2015 we started working with Myanmar's Ministry of Electricity
and Energy and the Ministry of Natural Resources and Environmental
Conservation to help build a more sustainable hydropower sector. Key to our
common vision of sustainably harnessing Myanmar's water resources is
building the needed capacities among officials from both ministries. We have
been ramping-up our efforts offering regular trainings on environmental and
social risk management, good international and industry practices and
technical topics including environmental flows of hydropower dams.

What we know is that we need to know more about the risks of hydropower
development in Myanmar's river basins. Coupled with these risks is
understanding how hydropower effects communities that rely on river
resources. If we understand the risks and engage stakeholders effectively,
we will be able to develop more sustainably. This is why IFC and the Myanmar
government will soon launch the first country-wide Strategic Environmental
Assessment. This extensive assessment will shed light on the river basins
that would be ideal to develop sustainably, and those which need for
example, to be conserved. Better knowledge on hydropower and its impacts
will support the government with strategic decisions on where and how to
construct as well as the economic viability of projected projects.

Myanmar has ambitious hydropower targets but is always plagued by project
delays and still remains to be among the least-powered countries in SEA.
Given these, is it still possible to achieve the nationwide electrification
target by 2030?

To achieve nationwide electrification targets by 2030, we are going to need
to focus on ramping up grid connectivity and accessibility. At the moment,
two-thirds of the population is not connected to the national electricity
grid, and 84 percent of rural households lack access to electricity. These
numbers are challenging, considering that only 200,000 customers were
connected in 2013. According to the National Electrification Plan, Myanmar
needs to increase this number to 500,000 new connections a year until 2030.

We know that public resources aren't going to make ends meet to finance all
the needs of Myanmar's power sector. Driving private sector investments to
help develop the sector sustainably is key and will also help improve the
sector efficiently.

With its vast water resources, hydropower is central to Myanmar's energy
mix. But with this said, tapping other renewables will also help Myanmar
achieve its goals.

When it comes to sustainability, Myanmar still has a long way to go in
hydropower. What is lacking in Myanmar's hydropower sector so that this may
be addressed?

Vikram Kumar: Sustainability requires strong leadership. Leadership in
hydropower companies will ensure better environmental and social systems are
in place improving business operations; leadership in financial institutions
will ensure the right investments are made to the highest quality companies;
and officials having the know-how and tools to address challenges is key for
long-term sustainability.

In Myanmar, resource sharing needs to be improved to local stakeholders
benefit as well. Through the SEA process we will work to engage key
stakeholders including civil society, local NGOs and thought leaders on what
sustainable hydropower means and how we're going to achieve it.

When we talk about hydropower, one project does not operate in isolation. We
need to think of how all development effects river basins. By changing our
lens from a project-to-project to a basin-wide or cumulative perspective, we
will be closer to achieving a more sustainable hydropower sector. As we have
learned from our experiences in South Asia, for example, public-private
sector cooperation and a commitment to improve governance in the hydropower
sector will enable all stakeholders to play a role and ensure inclusivity
and accountability and will promote sustainability from a basin-wide
approach.

Myanmar has been inviting other international firms to invest and help
develop hydropower but only a few are convinced. How should Myanmar address
this and consequently drive change in the hydropower sector?

Vikram Kumar: A more sustainable hydropower sector - one with solid
environmental and social guidelines, will definitely help improve the
investment climate here in Myanmar. International investors evaluate the
reputational and financial risk before entering an emerging market such as
Myanmar. Myanmar has potential to create a competitive market place for
hydropower investors that values sustainable business operations. IFC is
helping by financing and mobilizing the capital needed for private sector
projects that will support Myanmar's economic growth. When we review a
project for financing, we want to see how it plans to share its resources,
and how it will achieve the good international practices IFC represents.

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Ref:
http://asian-power.com/people/exclusive/find-out-why-ifcs-country-manager-my
anmar-thinks-its-electrification-targets-are-ch

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com