Sherpa Hossainy's Blog

Economic progress will stall sans energy policy reform: Report

Posted in Economy, Energy and power, Myanmar, Yangon by Sherpa Hossainy on July 10, 2013

Published in Myanmar Business Today (Vol 1, Issue 19) on June 13, 2013

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An energy report recently urged Myanmar to renew its energy policy in a bid to continue its economic development.

“Without electricity and a reliable energy system, Myanmar’s economic progress will stall. Addressing this will require new sources of domestic energy, an expanded and modernised electricity grid, and innovative solutions for rural energy access,” the report titled “New Energy Architecture: Myanmar Report” said, adding that Myanmar could emerge as the next Southeast Asian frontier by renewing its energy policy.

The report, which analyses the challenges currently facing Myanmar’s energy sector and provides insights to support the country’s important energy reforms, was launched at the World Economic Forum on East Asia in Nay Pyi Taw on June 6.

“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, 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 reintegrates into the global economy, it will need more energy to power its own development.

“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 Union Minister for Energy U Than Htay.

The report identifies energy as one of the most pressing economic challenges facing Myanmar today. According to the report, 74 percent of Myanmar’s population lack access to electricity, while electrification rates average only 16 percent in rural areas, where 70 percent of Myanmar’s population live. Myanmar’s per capita electricity consumption is among the lowest in Asia.

Providing 17 specific recommendations, the report highlights the need for transparent governance and effective institutions in Myanmar as a sound basis for developing the country’s energy system. Creating a clear environmental regulatory framework will not only underpin sustainability and social acceptance of large-scale energy projects, but will also increase transparency for investors, the report added.

“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, vice president of Asian Development Bank (ADB).

To improve efficiency and the competitiveness of the domestic energy market, the report called for the gradual removal of energy subsidies in favour of targeted support for the poorest. To achieve an effective transformation, Myanmar needs an integrated energy plan to guide investments and sequence reforms, the report said.

“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, Accenture’s Energy industry group.

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