Myanmar:TowardsUniversalAccesstoElectricityby2030

XiaopingWang,ESMAP,WorldBank

MaungWin,MinistryofAgriculture,LivestockandIrrigation,Myanmar

Bangkok,June21,2016

TOWARD UNIVERSAL ENERGY ACCESS2

• CountryandSectorOverview• SE4ALLEngagementinMyanmar• Nationalelectrificationplan(NEP)towarduniversalaccessby2030

• Implementationprogresstodate

Outline

TOWARD UNIVERSAL ENERGY ACCESS3

CountryandSectorOverview

TOWARD UNIVERSAL ENERGY ACCESS4

CountryOverview

Land Area: 261,319 sq mile (678,500 sq km)

Population: 53.9 million

States/Regions: 15

GDP per capita: US$1,190

Triple transitions since 2011:• from an authoritarian military system to

democratic governance;• from a centrally directed economy to

market oriented reforms;• from 60 years of conflict to peace in the

border areas.• First democratically elected government

tookoffice in April 2016

TOWARD UNIVERSAL ENERGY ACCESS5

VeryRichNaturalEnergyResources

Oilandgasfields(11.8tcf gasreserves) Hydropowerpotentialabout100GW

TOWARD UNIVERSAL ENERGY ACCESS6

LowPerCapitaEnergyConsumptionandElectrificationRate

• Solidfuels(biomass)representabouttwothirdsofthetotalprimaryenergysupply

• Electricityconsumptionpercapitaisoneofthelowestintheworld(263kWh/year)

• Gridelectrificationratioincreasedfrom16%in2006to34%in2015

• Averageelectrificationratioinruralareasisabout16%

TOWARD UNIVERSAL ENERGY ACCESS7

RapidlyGrowingElectricityDemand(~10%/yr)

No. Year

TotalConsumption

(kWh - million)

Electrified HouseholdPer Capital

Consumption(kWh / yr)

No of Household (Million)

Percentage

1 2010-2011 6,467.30 2.22 25% 108

2 2011-2012 7,876.72 2.42 26% 131

3 2012-2013 8.441.04 2.63 28% 141

4 2013-2014 9,795.09 2.91 31% 163

5 2014-2015 11,406.76 3.26 29% 222

6 2015-2016 13,550.267 3.70 34% 263

TOWARD UNIVERSAL ENERGY ACCESS8

SE4ALLEngagementinMyanmar

TOWARD UNIVERSAL ENERGY ACCESS9

GovernmentCommitmenttoUniversalAccessAlignswithUNSustainableEnergyforALL(SE4ALL)Objectives

• Myanmar wasanearlyendorseroftheUNSE4ALLInitiative

• Myanmaranhighimpactcountry- MyanmarisidentifiedasoneofthehighimpactcountriesthatofferthemostpotentialtomakerapidprogressbySE4ALL.

• Myanmarwasoneofthefirst10countrieswhichreceivedapproximately$2milliongrantsupportfromtheWorldBank/ESMAPSE4ALLTechnicalAssistanceProgramin2013todevelopanationalelectrificationplan(NEP)andinvestmentprospectus.

TOWARD UNIVERSAL ENERGY ACCESS10

Government Ownership andCoordination

• MOEE(formerlyMOEP)andMOALI(formerlyMLFRD)jointlyleadtheNEPpreparationwithparticipationfromothergovernmentagenciesandassistancefromtheWorldBank.

• MOEPandMLFRDco-manageconsultantstogetherwithWorldBank.Thisincludesstrategicguidance,datacollection,reviewofkeydeliverables,anddisseminationoftheresults.

• ConsultantsworkcloselywiththegovernmentteamsthroughouttheNEPpreparationprocess

• ClosecoordinationwithADB,JICAandotherDPs,privatesectorandCSOs.

TOWARD UNIVERSAL ENERGY ACCESS11

Processes andMilestones

May2013

OpenDialoguewithGov &otherstakeholdersandstartNEPprep

- StartplanningandpublicconsultationprocessforNEP

September2015

WBApprove$400mIDAProject

- Firstproject tosupport NEPimplementation

- Additional $200mmobilized

September2014

PresentDraftFinalNEP

- Gov Adopted NEPandestablishedNEEC

- Initiation ofIDAprojectpreparation

June2016

- Implementationunderway- FirstICBopenedbidsinMay

-FirstNEPResultsonthegroundExpectedinend2016

Activities

Outputs

TOWARD UNIVERSAL ENERGY ACCESS12

ObjectivesofMyanmarNationalElectrificationPlan(NEP)2015-30

• Toserveascomprehensiveactionplanfordeveloping,financing,andimplementingelectricityaccessscale-upprogramnationwide,withthetargetofachievinguniversalaccessby2030.

• Toalignsupportfromdifferentstakeholderstoimplementnationalaccesstargets,leverageconcessionalfinancingandmobilizeothersourcesoffinancingonatimely,ongoingandprogrammaticbasis.

TOWARD UNIVERSAL ENERGY ACCESS13

Stakeholders

Government

DevelopmentPartners

Utility

RegulatoryAuthority

LocalGovernment

SectorMinistries

PrivateStakeholders

Consumers

KeyFeatures:} Coordinatedleast-costtechnicalandinvestmentplanning

} Sustainablefinancingpolicy

} Stableflowoffunds

} Resultsfocused

NEPAdoptsaProgrammatic,Sector-wideApproach

TOWARD UNIVERSAL ENERGY ACCESS14

MyanmarNationalElectrificationPlantowarduniversalaccessby2030

- KeyMessages

Note: This map shows all settlement points thesame size (regardlessof population), overstatingelectrification with non-grid options (mini-gridand off-grid /solar home systems)

Least-costrecommendationfor2030

• By2030,themajorityare gridconnections

• Thisrepresents7.2millionhouseholds

• Totalcostisestimatedat US$6.0billion(US$800perconnection,average)

• Additionalinvestmentsneededforgeneration&transmission

TOWARD UNIVERSAL ENERGY ACCESS16

RoadmaptoAchieveUniversalAccessby2030

16

Today

2030Planned

20152020

2025

2030

34%50%

75%

100%

17

RecommendedSequencingofGridRoll-outproceedsfromlow-costtohigh-costconnections

• Denseareasrequireshorterdistributionlinesandlowercostperconnectionandwillbeconnectedfirst

• Remotecommunitiesrequirelongerlinesandhighercostandwillbeconnectedlater

• Chin,Shan,KachinandKayahhavehighestcostperconnection,thustobeconnectedinthefinalphases

Connectedearlier

Connectedlater

• 3-4% of thevillagesinthelastphasesofgridrolloutarerecommendedforpre-electrification

• Shan,Chin,Kayah, KachinandTanintharyi representmajorareasforpre-electrification

14

Recommendationsforoff-gridpre-electrification

TOWARD UNIVERSAL ENERGY ACCESS1914

NEPFlowofFunds

Nationalgrid

Therearesufficientfundsandpredictablefinancingflowingthroughtheentireelectrificationprogram

Projectarebeingplannedandprioritizedinaleastcostmanner

Projectsarebeingbuiltefficientlyandachievingsocialobjectives

Strong Institutions willensure…

Nationalgridexpansion

Tarifffromelectricity sales

Donorfunding/financingUnionbudget

TemporaryandPermanentminigridexpansion

Household-levelexpansion(SHS)

Fundsflowtoentitiesresponsiblefor:

Coordinationandallocationoffundingonsector-widebasis,basedonplan

ABRIDGE TO UNIVERSAL ENERGY ACCESS2014

InstitutionalReforms

YESC§ Develop

investmentprogram

§ CorporatizeYESC

ESE/MESC• FollowYESCpath§ Setupsub-

franchiseconcessions

Mini-gridconnections§ DRD manage&

monitor§ Decentralized,

privatesector-ledapproach

§ Developregulatoryframework

Offgridconnections§ DRD manage&

monitor§ Re-focus

financialincentives

§ Supportprivatesectorprovision

PrivateSectorInvestinutilitycorporations+Participateinsubfranchiseconcessions +Provide solarhomesystems

NationalElectrificationExecutiveSecretariatreportingtoVPOffice

§ OverallmanagementandcoordinationofNEPplanning

§ Performancereporting§ Pointsourcefordonors

Donors§ TAtoestablishandtrain

newentities§ Concessional finance§ Establishloanprogram

withbanks

UnderMOEEleadership

IndependentRegulator

§ Adviseontariffs,standardsandsubsidiesneeded forgrids

§ Adviseonmini-gridpermits+interconnection

TOWARD UNIVERSAL ENERGY ACCESS21

First5-yearInvestmentProspectus,FY2016-20

~ To implement about 1.7 million additional grid connections

~ US$ 700 million from FY 2015-19 with national least-cost roll-out, including:

- US$670 million of capital investments and - US$30 million of TA will be needed.

~ Potential sources of funding include Government, DPs, private sector and users’ contribution

TOWARD UNIVERSAL ENERGY ACCESS22

SharedResponsibilitiesbetweenUnionandLocalGovernments,Communities/Households,andPrivateSector

1)NEPoffgrid model 2)NEPgridextensionmodel

GoodsandmaterialsforMVnetworks

MOEE,local gov

MVInstallation MOEE, localgov

LVnetworks VECs/HHs,MOEE(?), localgov (?)

Connectioncharges

HHs

TOWARD UNIVERSAL ENERGY ACCESS23

ImplementationProgresstoDate

NEP Implementation: Initial Results

• InformedWBG/IDAoperationof$400million (approvedSept2015andexpectedtobenefit6millionpeople)

• Mobilizedadditional$260millionconcessionalfinancing

• Informeddevelopmentofthemarket-basedIFCLightingMyanmarProgram

• PartneredwithADB,JICA,KfW,GIZ,Italy,andNorwaywhouseNEPascommonplatformfortheirsupporttoelectrification

Off-grid Electrification for 2016-2017 Fiscal Year

Ø Electrification System

ØSolar Home System

ØMini-Grid System

( Solar, Hydro, Bio-mass and Bio-gas System)

Ø Electrification Item (9 items)

ØHouse-hold Electrification

(small, medium ,Large)

ØRural Health Centre

ØSchool (Primary, Middle, High)

ØReligious Building

Ø Street Light

Sagaing RegionTownships - 11 Villages - 91Households - 7756

Kayin StateTownships - 5Villages - 110Households - 7896

Shan StateTownships - 25 Villages - 730Households - 26606

Tanintharyi RegionTownships - 6Villages - 164Households - 16666

Ayeyarwady RegionTownships – 10Villages - 363Households - 136081

Rakhaing StateTownships - 9Villages - 350Households - 30384

Chin StateTownships - 5 Villages - 274Households - 11379

Remote communitiesareas located far beyond11 miles from nationalgrid and unlikely toreceive electricity innext 10 years aretargeted to pre-electrify.

Off grid project Area (FY16-17)

First ICB for Solar PV Systems Launched in March 2016

27

• SHS - 136,768 Nos(30Wp, 45Wp, 60Wp)

• School - 1,564 Nos(120Wp,375Wp,475Wp)

• Health Center - 328 Nos(180Wp)

• Religious Building - 2,096 Nos(120Wp)

• Street Light - 10,410 Nos(70Wp)

Total:151,166solarPVsystems,in12lots,estimatedcostsof$67m

Bidevaluationisunderway.Atotalof354bidsforall12lotsreceived

28

TargetingsubsidiesforthePoorerofthePoor

- DRDoffersSHSofthreedifferentsizes,thesmallestwithhighest%ofsubsidies,targetingthepoor,tomeetthebasicneedsforlightingandICT.

• Each village participating in the Off-Grid program must form a

Village Electrification Committee (VEC)

• DRD will develop guidelines for VEC formation.

vTo organize at least 9 persons in the committee

vTo involve at least 3 women in the committee

vTo involve 50% of middle age persons

vTo be a collaborator for the development of the village

Community Organization and Mobilization

VEC

– Explain the systems to villagers

– Count the number of each system type

– Collect down payments

– Fill out SHS Form, keep one copy for records

– Transfer the down payment to NEP account.

Sr. Type of Training Place Date No.of Trainee Remark

1 Training for Verification the Component of Solar Home System and Design Calculation

Department of Rural Development(Head Quarter)

19.1.2016 –22.1.2016

45Union -35S&D -10

Pro-Engineering

2 Training for Solar Mini-grid Installation and Verification

Department of Rural Development(Head Quarter)

4.2.201639

Union -23S&D -16

ADB (TechnicalAssistance)

3 Capacity Building for Biomass, Biogas Hydro Mini-grid

Department of Rural Development(Head Quarter)

10.3.2016-11.3.2016

25Union -23S&D - 2

ADB (TechnicalAssistance)

4 Training for Basic Department

Training

Challenges and Barriers

• Lack of communities institutional capacity due to people contribution at the beginning of the project

• Most of the users don’t want to pay the cost of system without seeing the product

• Poor access to finance by some users• Lack of knowledge for the use of good qualified product, operation

and maintenance of the system• Lack of private sector participation in remote areas • Guidelines of the mini-grid system, operation and maintenance,

collection of tariff (1% of household target in first year of NEP Project)

• Time is limited to complete target installation for FY16-17 • Feasible data for mini-grid and budget allotment for feasible study

Lesson Learned and Conclusions

• Visionandsustainedhigh-levelgovernmentcommitmenttoachievinguniversalelectrificationhavebeencrucialtothepreparationandimplementationofNEP.

• Programmatic,sector-wideapproachhelpedalignandsustainengagementfromdifferentstakeholdersforimplementingrapidscale-upofelectrification.

• Onceoverthefinancinghurdle, institutionalcapacityinthepublicandprivatesectorbecomesamajorconstrainttoimplementationanddeliveryofresults.