Posted courtesy of Foreign Affairs

October 1, 2015

Out of Darkness: Myanmar's Quest to (Em)Power its Citizens

KEITH RABIN is President of KWR International, with offices in Singapore and New York.

CHRISTINA MADDEN is Senior Analyst at KWR International, with offices in Singapore and New York.

As Myanmar emerges from nearly six decades of economic stagnation and isolation [1], perhaps no issue is as pressing to its development as the need to upgrade the country's antiquated power sector [2]. It is believed that the national power grid currently connects less than a third of Myanmar's 51 million people [3]. More than half the wiring in the country, which is roughly the size of Texas, is estimated to be at least 70 years old. Without adequate power, Myanmar will never see a transition toward a brighter future [4]; without power, advances in education, health care, industry, and regional development, it is simply not possible.

But electrification is also a political issue. Myanmar's grid is concentrated primarily in urban areas [5], leaving those who live in rural environments-approximately 70 percent of the population- largely without grid access. Some rural citizens report paying anywhere from 10 to 20 times what government-subsidized grid power costs, and they rely on alternative sources, often powered by diesel-powered mini-grids [6]. Myanmar's economic opening [7] has led many to expect improved living standards from the government. And within the government's attempt to build a more representative democracy is a push to win the political support of traditionally remote populations, some of which have been affected by ongoing ethnic conflict and social tensions. Rural electrification [8], in addition to helping these regions and the country as a whole develop, is one means of building support for a more inclusive Myanmar.

Revamping the nation's electrification system, however, will not be easy. Myanmar's installed electric capacity [9]-approximately 4,500 megawatts (MW), according to government figures-is a fraction of what it should be for a country of its size. Thailand, by comparison, has a comparable land mass and population, but its installed capacity is roughly ten times larger than that of Myanmar [10]. Adding to the problem, about 27 percent of electricity generated in Myanmar is lost in transmission due to the system's antiquated nature. Seasonal fluctuations in hydropower [11]-Myanmar's largest source of electricity-places additional strain on the system, which has led to blackouts, deficient power supply for commercial users, and protests.

POWERING THE ECONOMY

Myanmar has ambitious growth plans [12]. Officials in Naypyidaw have forecast a national growth rate of 9.3 percent for the 2015-16 fiscal year through a combination of job creation and activity in tourism, telecommunications, agriculture, and other sectors. Inadequate power proves particularly troublesome for the manufacturing sector. In Mandalay, one foundry prices its production of pumps differently depending on whether they are produced during rainy season, when hydroelectric and grid power is available at lower prices, or during the dry season, when the company must supplement supply through diesel-powered backup generators. Making matters worse, the nation's use of subsidized tariffs means that the government provides power to citizens at a loss. Several years ago, it was estimated these subsidies created an annual deficit of over $275 million. Under past regimes [13], when economic development and domestic energy use were less of a priority, revenue gained from oil, gas, and other resource exports was used to finance the country's survival in the face of a harsh sanctions regime. These programs largely benefited a small group of elites and select institutions and are now unpopular, even though the capital and expertise that is derived could potentially fund power sector development.

According to the World Bank, universal electrification should be both "achievable and affordable" in Myanmar by the year 2030 [14]. To this end, the organization has committed $1 billion in financial support [15] to expand electricity generation, transmission, and distribution for the national grid as well as off-grid development. The funds will be utilized to support a National Electrification Plan [16], which the government has developed in cooperation with the World Bank over the past few years. An initial $400 million loan was recently approved by Myanmar's National Assembly as well as by the World Bank Board of Directors. Coordination meetings between donors, interested private firms, and other parties are now under way, with an anticipated program launch for the first phase before the end of the year.

Extending the national grid to rural populations is viewed as the most efficient strategy for electrifying Myanmar, both economically and technically speaking. The grid is easier to scale than other systems, reducing the generation cost per unit with the ability to draw, and integrate, distribution from a range of energy sources. It is also the favored strategy...

To read the complete article, please visit:
https://www.foreignaffairs.com/articles/burma-myanmar/2015-10-01/out-darkness

Links
[1] http://www.irrawaddy.org/business/prospects-problems-burmas-economic-growth.html
[2] http://www.bbc.com/news/business-24470644
[3] https://europa.eu/eyd2015/en/iom/posts/considering-implications-increased-urbanisation-myanmar
[4] https://www.foreignaffairs.com/articles/burma-myanmar/2014-01-17/how-invest-myanmar
[5] http://www.myanmarinsider.com/myanmar-the-rural-urban-divide/
[6] https://energypedia.info/images/b/bf/WB_NEP_seminar_ADB_presentation_Tharakan.pdf
[7] https://www.foreignaffairs.com/articles/burma-myanmar/2013-03-07/soft-sein
[8] https://www.foreignaffairs.com/articles/africa/2015-02-16/power-poor
[9] http://myanmar-electric.com/post/18/Industry-Facts.html
[10] http://www.egat.co.th/en/index.php?option=com_content&view=article&id=80&Itemid=116
[11] http://www.irena.org/DocumentDownloads/Publications/IRENA-ETSAP_Tech_Brief_E06_Hydropower.pdf
[12] http://fortune.com/2014/09/18/asia-myanmar-burma-telecommunications-market/
[13] https://www.foreignaffairs.com/articles/southeast-asia/2010-11-23/burmas-stubborn-state
[14] http://www.worldbank.org/en/news/feature/2014/10/08/powering-up-myanmar-more-than-7-million-new-electricity-connections-needed-by-2030
[15] http://www.worldbank.org/en/news/press-release/2014/01/26/world-bank-group-to-invest-2-billion-in-myanmar-to-support-reforms-and-reduce-poverty
[16] https://www.esmap.org/node/4009

---

---

KWR International Advisor

Editor: Dr. Scott B. MacDonald, Sr. Consultant

Deputy Editors: Dr. Jonathan Lemco, Director and Sr. Consultant and Robert Windorf, Senior Consultant

Publisher: Keith W. Rabin, President

---

To obtain your free subscription to the KWR International Advisor,
please click here to register for the KWR Advisor mailing list

For information concerning advertising, please contact:
Advertising@kwrintl.com

Please forward all feedback, comments and submission and reproduction requests to:
KWR.Advisor@kwrintl.com

Website content © KWR International