Energy Sector in the Greater Mekong Subregion
The Greater Mekong Subregion (GMS), comprising Cambodia, Lao People's Democratic Republic, Myanmar, Thailand, Viet Nam, and Guangxi Zhuang Autonomous Region and Yunnan Province in the People's Republic of China, has diverse energy resources that are unevenly distributed. The total energy investment costs under the GMS program have amounted to $1.7 billion, 17% of the total GMS project costs of $10.3 billion. To date, the Asian Development Bank (ADB) has provided about $185 million of assistance to the GMS energy sector, of which 95% or about $176 million are loans, while $9 million has been in the form of technical assistance. The energy sector is the second largest sector in the GMS after the transport sector.
This evaluation of ADB's assistance to the energy sector in the GMS identifies lessons and makes recommendations for improving current and future operations. The findings of this study feed into the broader GMS regional cooperation assistance program evaluation.
- The key to the GMS's program success was the setting up of effective institutional arrangements with strong government ownership.
- Notwithstanding the generally effective institutional arrangements in the GMS energy sector, both the GMS energy program's internal coordination, as well as inter-program coordination with other sectors, could still be improved.
- There is a need to enhance the institutional and policy frameworks of member countries to ensure that environmental and social costs in energy systems remain reasonable.
Overall assessment and recommendations
The overall assessment rating on the performance of ADB assistance to the energy sector in the GMS is "successful," with some areas needing improvement.
The following are recommendations and options for future operations:
- More attention should be given to supporting other energy investments besides power trading, consistent with ADB's initiatives for energy efficiency and climate change.
- ADB should be more strategic in providing assistance by leveraging its concessional resources to mobilize financing from the private sector and other development partners.
- More creativity and flexibility are needed in addressing safeguard implementation on high-impact energy projects.