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Achieving Universal Access to Modern Energy

in the East Asia and Pacific RegionNPT, Myanmar

May 23, 2013

Dr. Dejan Ostojic,Sector Leader, Energy

East Asia and Pacific RegionThe World Bank

Report funded by AusAID

Access to Modern Energy: Where Do We Stand?

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Electrification and Economic Development

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Many EAP countries have achieved substantial progress over the last decade.Universal access to electricity by 2030 is within reach of EAP countries… but low access countries have a steep path to universal access.

Electrification and Social Development

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Three countries categories of electricity access: low, medium and high.Access rates are not always correlated to poverty levels, e.g. Lao PDR.

Access to Modern Cooking Fuels

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Access to modern cooking fuels remains low, even in countries with high access rates to electricity (China, Thailand). Populations without access to modern cooking fuel are much higher that for electricity.

Access to Modern Cooking Fuels and Health

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A major breakthrough is needed to provide universal access to modern cooking fuels (LPG/bio-gas, kerosene, electricity) and advanced cooking stoves … but prolonged dependence on solid fuels is a major barrier to achieving the MDGs.

A Vast Urban-Rural Divide in Energy Access

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EAP countries have to work on two paths to improve access to modern energy … but both paths are much more challenging in rural areas.

Reaching Universal Access to Electricity

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The Path Forward for Electrification

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Level of electricity

access (% HH)

Grid Off-Grid

High (>95)China, Thailand, Vietnam

Finalizing “last-mile” issues

Innovating energy solutions for remote HH

Medium (50–95)Indonesia, Lao PDR, Mongolia,Philippines

Maintaining momentum of effective programs; jumpstart programs that have stagnated.

Solidify existing efforts and commit to pass necessary reforms to serve remote HH and communities.

Low (<50)Cambodia, Myanmar, most Pacific Island Countries (PICs), and Timor-Leste

Adopt NEP (National Electrification Program) and make a serious commitment to creating/ expanding national grid for HH benefits.

Develop the institutional andregulatory framework for off–grid solutions

Delivering Results on the Ground: Key Principles

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1. Ensure Sustained Government Commitment

2. Implement Effective and Enabling Policy Framework:

3. Push for Accountability and Results

Delivering Results on the Ground: Key Principles

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Ensure Sustained Government Commitment:• Long-term commitment at the

national level• Establish credible time-bound targets• Ensure transparency and

accountability• Facilitate links with other sectors• Coordinate with local governments• Promote income-generating activities

and productive use of electricityImplement Effective and Enabling Policy Framework:• Cost effectiveness: least cost management of boundary between

grid and off-grid with the objective to deliver a well defined level of service (not specific technology)

• Affordability – to consumers, to service providers, and to subsidy provider(s)

• Consumer focus and timing of electrification – do not underestimate willingness to pay for good service.

Delivering Results on the Ground: Key Principles

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Push for Accountability and Results:• Designate entity(ies) with clear

responsibility for grid-based and off-grid electrification

• Adopt appropriate technical codes and service standards

• Make service providers accountable to consumers for quality of service

• Monitor cost achieved by service providers

Program Financing: • Develop financial framework using both internal and external

sources• Use explicit and well targeted subsidies to ensure:

• affordability to consumers• financial viability of the service provider• affordability to the budget

• Develop “bankable” sector-wide and programmatic approach (“Sector-Wide Prospectus”) offering multiple points of entry for donors and private sector.

Two Scenarios for Electricity Access

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Business-As-Usual: electricity access grows at the same average annual rate as in the last decade.• 21 million households (about 100 million people) remain without access by

2030Universal Access Scenario: all households gain access by 2030.

Investment Needs for Electricity Access

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Investment needs by 2030:- Business-As-Usual: $30 billion- Universal Access Scenario: $56 billion

Incremental needs for universal access:- $24 billion for rural areas ($19.7 billion grid and $4.2 billion off-grid)- $2 billion in urban areas.

Myanmar: Towards Universal Access to Modern Energy

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Electrification Agenda

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Key challenges:• Ensure adequate and competitive generation supply to keep the pace with population and economic growth.• Extend electricity to over 40 million people (about 8 million households) of which 70 percent are in rural areas• Improve financial health of power enterprises (MEPE, YESB, ESE) to ensure steady and rapid increase in electricity access.

• Promote the use of renewable energy resources and technical innovations to reduce costs, improve reliability, and provide timely service to all households

Key Messages

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Access to modern energy, both electrification and clean cooking fuels, is essential for the achievement of MDGs and eradication of poverty, but the electrification is an immediate priority for economic and social development in Myanmar

The Goal of Universal Access to Electricity by 2030 is affordable – but it requires sustained government’s commitment, re-focusing of sector policies, and significant financial support from donors

The National Electrification Program (NEP) should embrace both grid and off-grid solutions, including appropriate policies and technical innovations to reduce costs, improve reliability, and provide timely service to all households.

The World Bank Group will support NEP , both financial support for investments and technical assistance for institutional development will be available to Myanmar for the implementation of NEP