The World Bank’s board has approved a $140m interest-free loan to fund a more efficient power plant in Myanmar.
The bank has stepped up its engagement with the Southeast Asian country, which is rich in resources but underdeveloped after decades of isolation under military rule, as it seeks to support reforms by the the quasi-civilian government that came to power in 2011.
The gas turbine plant in the eastern Mon State – about a four-hour drive from the capital Yangon – will provide 106MW of electricity, covering half of the peak demand in the state and 5 per cent in the country, the World Bank said.
"Myanmar's transition has tremendous potential to reduce poverty. A more reliable electricity supply will create jobs and improve lives," Kanthan Shankar, the World Bank's country manager for Myanmar, said in a statement.
The old plant on the same site uses technology that is close to 40 years old, and only produces 40MW of power. A third of Myanmar's 3,500MW of power generation comes from gas-fired plants, most of which are also decades-old.
Only 29 per cent of households have access to electricity, one of the lowest levels in the world and chronic power outages sparked protests in Yangon last year and prompted the government to announce emergency measures to boost electricity supplies.
The poverty-fighting World Bank specifically wanted to fund a plant in a more rural area, said Axel van Trotsenburg, the bank's vice president for East Asia and the Pacific. While much of the country's energy needs are in Yangon, most of Myanmar's poor people live in the countryside.
He said the power plant project was prepared in nine months, compared to the 18 to 20 months most projects take, underscoring Myanmar's commitment to reforms.
As part of a strategic reorganization, the World Bank has put a priority on approving projects more quickly, while still maintaining social and environmental safeguards.
Myanmar overcame a major hurdle to getting help from international financial institutions in January when it cleared about $420m in debt arrears accumulated under the military.