(EnergyAsia, June 7 2013, Friday) — Myanmar’s abundant energy resources will play a key role in the nation’s transformation and re-integration into the global economy, said the Asian Development Bank (ADB).
In a just released report, “The New Energy Architecture: Myanmar”, the bank said Myanmar could emerge as the next Southeast Asian economic frontier and take its place in a prosperous region by “renewing” its energy policy. The report analyses the challenges facing Myanmar’s energy sector and the reforms needed to shape the country’s future.
It identifies energy as among the most pressing economic challenges for Myanmar today with nearly three-quarters of its population lacking access to electricity. More than 70% of the country’s population live in rural areas, where electrification rates average only 16%. Without electricity and a reliable energy system, Myanmar has little chance of providing basic requirements for health, job creation, and sustainable development.
To meet these challenges, the country will need to develop different sources of domestic energy supplies while expanding and modernising the electricity grid. In rural areas where the grid cannot be extended in coming years, innovative solutions for rural energy access are needed, said the ADB, which co-produced the book with Accenture and the World Economic Forum.
“Myanmar’s abundant gas resources and strategic position between some of the most dynamic Asian economies means it is crucial to regional energy security. As Myanmar re-integrates into the global economy, it needs more energy to power its own development and is therefore poised to form new national energy strategies and policy frameworks,” said the ADB.
These strategies must balance enabling economic growth and providing energy security and access in a sustainable way, according to the report.
“Myanmar is embarking on a new phase of development and the energy sector will be very important. This comprehensive and informative study will support the economic and social development of Myanmar,” said Minister of Energy of Myanmar, U Than Htay.
“Myanmar has a historic opportunity to carve out its own niche in the global economy. Recasting its energy architecture will be pivotal to this transformation and to its economy’s sustainable development,” said Roberto Bocca, Senior Director, Head of Energy Industries at the World Economic Forum.
Among 17 specific recommendations, the report highlights creating a clear environmental regulatory framework that will not only underpin sustainability and social acceptance of large-scale energy projects in Myanmar, but also increase transparency for investors.
“To meet the country’s rapidly growing electricity demand, expand rural energy access, and ensure environmental sustainability, Myanmar urgently needs to attract investments by improving regulatory frameworks, promoting public-private partnerships, and undertaking crucial sector reform,” said Stephen Groff, ADB Vice President.
As Myanmar plans for major expansion of its energy sector, it has a unique opportunity to build efficiency into the strategy that would require adopting energy efficiency standards and policies and educating its population about why and how to save energy.
To improve efficiency and the competitiveness of the domestic energy market, the report calls for the gradual removal of energy subsidies in favour of targeted support for the poorest. The report concludes that to achieve an effective transformation, Myanmar needs an integrated energy plan to guide investments and sequence reforms.
“The development of an integrated new energy plan and system offers Myanmar a significant opportunity to design a path to sustainable and secure economic growth, bolstered by its energy industry,” said Arthur Hanna, Senior Managing Director at Accenture’s Energy industry group.