This capacity development technical assistance (TA) aims to support the creation of rural infrastructure, including energy access projects and will have as its main objectives: (i) to support the installation of clean energy-based systems for providing energy access (mostly solar PV and biomass-based systems) to schools and other public infrastructure in at least 25 villages, (ii) develop geospatial least cost energy access plans and an investment plan for select states and regions in the country, and (iii) to strengthen the capacity of the government institutions and the private sector to manufacture, install, operate and maintain small-scale clean energy systems. The proposed TA will be financed under the Japan Fund for Poverty Reduction Program (JFPR). The grant will finance pilot installations in the central dry zone (Mandalay region, Sagaing region and Magway region) and Chin, Kayah and Rakhine states.
The Ministry of Livestock, Fisheries, and Rural Development will be the Executing Agency (MLFRD). The Department of Rural Development within MLFRD will be the implementing agency. The implementation period would be June 2014 to February 2016.
|Project Rationale and Linkage to Country/Regional Strategy
Myanmar is one of the poorest countries in the world with a gross domestic project (GDP) per capita of $857, a Human Development Index (HDI) rank of 149 out of 187 countries, and 26% of its population living in poverty in 2010. The Asian Development Bank (ADB), like most other international development institutions, has not extended a loan or technical assistance to Myanmar since 1988. In response to the ongoing major reforms by the Government of Myanmar towards a democratic system and market-based economy, in early 2012, ADB adopted a phased approach to re-engagement with Myanmar.
According to the International Energy Agency (IEA), Myanmar is an extreme example of energy poverty. Myanmar's average electrification rate was about 28% in 2012. Yangon City has the highest electrification rate (72%), followed by Nay Pyi Taw (65%), Kayar (42%), and Mandalay (35%). Rural areas are poorly electrified, with an average rural electrification rate of 16%. Even though electricity consumption in Myanmar has doubled in the last 10 years, in 2012, national average per capita consumption of electricity, at about 140 kilowatt-hour (kWh) per annum, is the lowest among the 10 Association of Southeast Asian Nations (ASEAN) countries and among the lowest in Asia. This low national average per capita consumption of electricity is due to low electrification rates, low industrial development and lack of investment. Lack of electricity impedes economic development and achievement of the United Nations Millennium Development Goals (MDGs).
As per data from IEA , Myanmar's primary energy supply sources are coal, oil, natural gas, hydropower, and biomass. Myanmar's primary energy supply source was biomass, followed by natural gas and oil. Coal and hydropower accounted for only small shares (0.9% and 2.4%, respectively) of total energy supply, although they are the main sources of power generation. These shares are changing, with hydropower production growing at a rate of 9.2% per annum. Investment in coal-powered plants, gas fields, and oil and gas pipelines is also increasing rapidly. Total installed power generation capacity in Myanmar in 2011 was 3,361 megawatts (MW), consisting of 2,520 MW (75%) of hydropower capacity, 715 MW (21%) of gas-fired capacity, and 120 MW (4%) of coal-fired capacity. Although the installed capacity exceeds the 2011 peak load of 1,533 MW, the available capacity is low. Particularly, during the dry season, hydropower plants cannot generate at full capacity due to low water flows. Hence, Myanmar's power grid is unreliable during the dry season.
Approximately two-thirds of primary energy in Myanmar is supplied by biomass (firewood, charcoal, agriculture residue, and animal waste). Firewood, used in both urban and rural areas, accounts for more than 90% of biomass-sourced energy, most of which is harvested from natural forests. Charcoal, which accounts for 4% 6% of total firewood consumption, is mainly used in urban areas. Due to high dependence on burning solid biomass fuels for energy in poorly ventilated dwellings causing indoor air pollution, Myanmar experiences high incidence of acute respiratory diseases and high mortality/morbidity rates. Nearly 91% of households collect firewood, 85% of households cook on open fires and only 12% of households own fuel efficient stoves. Hence, despite being home to Asia's most extensive tropical forest ecosystems, Myanmar's forests are considered to be under major threat from a combination of commercial logging and gathering of firewood.
Link to Country Partnership Strategy:
This TA addresses key medium-term goals of ADB elaborated in the interim CPS 2012 -2014 for Myanmar, namely (i) to assist the government in promoting sustainable and inclusive economic development and job creation in support of poverty reduction, (ii) enhancing connectivity domestic and regional, rural and urban through both hard and soft infrastructure, and (iii) help accelerate economic growth, create income opportunities, and bridge rural urban gaps.
The TA also addresses ADB''s three priority areas in the interim strategy period: (i) building human and institutional capacity in ADB''s areas of focus and to help lay the foundation for medium-term engagement and effective development processes; (ii) creating access and connectivity for rural livelihoods and infrastructure development by promoting basic social services, improving rural infrastructure to boost farm productivity and incomes, lowering transaction costs, enhancing opportunities for domestic and cross-border trade and investment, and (iii) improving access to reliable and sustainable utility services.