Yangon - IFC, a member of the World Bank Group, signed a mandate agreement with the Myanmar Ministry of Electric Power to help improve the power supply in the country’s most populated city of Yangon. A reliable and efficient electricity supply system is essential for millions of residents and enterprises in Yangon to improve livelihood, expand business opportunities and increase domestic and international trade.
The mandate signed on February 26 will involve IFC’s technical support and assistance in transforming the Yangon Electricity Supply Board, or YESB, which comes under the Ministry of Electric Power responsible for power distribution in Yangon - into a commercially viable corporate entity. With IFC’s help, the government and YESB will take necessary actions that allow YESB to operate as a standalone and regulated electricity supplier within a three year time frame.
“Huge investment in the power sector is needed to improve low power supply. Myanmar government encourages private sector participation and restructuring of the existing state-owned enterprises to reform the electric power sector,” said U Maw Thar Htwe, Deputy Minister for Electric Power. “I firmly believe that we will achieve significant outcomes through enhancing cooperation between our Ministry and IFC."
To help progress the corporatization process and ensure necessary financing is available, IFC is envisaging taking an equity stake in YESB.
“The mandate signing is a significant step that shows a firm commitment by the government of Myanmar to move forward with corporatizing the energy sector,” said Karin Finkelston, IFC Vice President for Asia Pacific. “This transformation of YESB will eventually extend reliable and affordable power supply to underserved segments, improve system reliability and reduce distribution losses. If successful, this project will be truly transformational as it will help revitalize power supply in Myanmar’s most populated city. It will also set an example for corporatization of other parts of the power sector and beyond.”
Support for the corporatization of YESB is part of the World Bank Group’s efforts to pursue public-private partnerships in the power sector, which will allow the government to leverage private capital to increase investments in the electricity sector. IFC is also advising the government on the competitive selection process for the 250 MW combined cycle gas fired Myingyan Independent Power Producer project. This work complements IFC’s engagement on the distribution end by helping to create a Public-Private Partnership framework that would allow quality power developers to invest in Myanmar and provide much needed power supply to close the fast growing gap between soaring demand and supply. The World Bank Group plans to provide $1B in financial support to expand electricity generation, transmission and distribution to help everyone in the country gain access to electricity by 2030.
IFC, together with the World Bank, is supporting reforms and investments in Myanmar to strengthen the private sector and create jobs to reduce poverty and boost shared prosperity. IFC works to improve the country’s investment climate, access to finance, and infrastructure, with an initial focus on the power and telecommunications sectors.