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Myanmar: Power System Efficiency Project Brings Country Closer to Universal Electricity Access

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The World Bank’s Board of Executive Directors today approved a $350 million credit from the International Development Association (IDA) to increase the output and efficiency of power generation and improve the resilience of Myanmar’s electricity system to climate change and disasters. The Board also approved $110 million in additional financing for the Essential Health Services Access Project, implemented nationwide since 2015.

Myanmar needs to double its current installed power generation capacity over the next five to seven years to achieve universal electricity access by 2030. The Myanmar Power System Efficiency and Resilience Project will finance the upgrade to the Ywama gas-fired power plant, improving the availability and reliability of electricity services to consumers in the Yangon region. Investments in the power plant and in transmission infrastructure will free-up electricity supply in the rest of the country and will remove capacity constraints to enable more households to connect.

The project also contributes to Myanmar’s climate change mitigation and adaption commitments under the Paris Agreement. By using highly efficient technology, the project will help reduce greenhouse gas emissions per unit of electricity produced and investments in the power network will improve the system’s preparedness against climate change and disasters.

“Myanmar has the lowest electrification rate in South East Asia with only 50 percent of households connected to the public grid. This project will help close the power supply gap in an affordable and environmentally sustainable way, thereby removing one of the key constraints to achieving Myanmar’s goal of universal electricity access by 2030,” said Mariam Sherman, World Bank Country Director for Myanmar, Cambodia and Lao PDR.

The Government of Myanmar adopted the National Electrification Plan in 2014 to achieve universal access to sustainable electricity services by 2030, drawing on World Bank analytical support provided through the National Electrification Project (NEP). To date, the NEP has delivered electricity access to 2 million people and to schools, rural health clinics and community centers by extending the public grid in over 5,000 rural villages and delivering Solar Home Systems and renewable energy mini-grids in 7,200 villages throughout the country.

Access to Quality Health Services

The additional financing for the Myanmar Essential Health Services Access Project (EHSAP), consisting of a $100 million IDA credit and a $10 million Global Financing Facility (GFF) grant, will continue to support the Ministry of Health and Sports (MOHS) to increase access to quality essential health services, with a focus on maternal, newborn, and child health.

Since 2015, EHSAP has supported over 12,000 primary healthcare facilities across the country, ranging from township hospitals to the sub-rural health centers, with monthly funds to improve service delivery at these critical health facilities. The project strengthens the quality of healthcare by building skills of frontline health workers. It also aims to improve the regularity and systematic approach of healthcare supervision visits and the efficiency and responsiveness of public finance through financial trainings and financial data system modernization.

The additional finance will support primary healthcare infrastructure in some of the most socio-economically disadvantaged townships so that they are fully functional for essential service delivery and to scale up activities to strengthen the health system, including pandemic preparedness and response, which will support inclusion of health service delivery for all people in Myanmar. 

“We highly appreciate the World Bank and Global Financing Facility’s additional finance for the Essential Health Services Access Project. It provides vital support in reaching the goal of our National Health Plan 2017-2021 to extend access to essential health services of good quality for all people in Myanmar,” saidUnion Minister for Health and Sports Dr. Myint Htwe.“It moreover contributes to the objective of the Myanmar Sustainable Development Plan to reach universal health coverage in a pro-poor manner.”

COVID-19 Response

In the fight against COVID-19, funds under EHSAP are also being mobilized to assist capacity building and operational costs to intensify surveillance and testing activities in all states and regions, establish a functioning information and reporting system for all suspected cases, facilitate engagement with basic health staff and Ethnic Health Organizations for community surveillance, disseminate guidelines to health staff and community volunteers, and develop public Information, education and communication materials.

The World Bank has provided a $50 million loan for the Myanmar COVID-19 Emergency Response Project to help Myanmar fill a critical gap in its contingency plan to urgently increase hospital preparedness and surge capacity in order to reduce the spread of COVID-19, protect health workers, and treat patients.   

This project will also receive an $8 million grant from the World Bank Group’s Global Pandemic Emergency Financing Facility (PEF). The PEF is intended to provide financial support to IDA-eligible countries in case of major multi-country disease outbreaks. The PEF grant for Myanmar will support the surge response in the health sector, with special attention on benefiting the most vulnerable groups and communities in conflict- affected areas and ethnic health providers.

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Impact of COVID-19 on Commodity Markets Heaviest on Energy Prices

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While metal and agricultural commodities have recouped their losses from the COVID-19 pandemic and are expected to make modest gains in 2021, energy prices, despite some recovery, are expected to stabilize below pre-pandemic levels next year, the World Bank said.

Oil prices fell dramatically in the early stages of COVID-19 and have only partially regained pre-pandemic price levels, while metal prices declined relatively modestly and have returned to levels that preceded the shock, according to the semi-annual Commodity Markets Outlook report. Agriculture prices were relatively unaffected by the pandemic, but the number of people at risk of food insecurity has risen as a result of the broader effects of the global recession.

“The impact of COVID-19 on commodities has been uneven, and could have lasting effects for energy markets,” said Ayhan Kose, World Bank Group Acting Vice President for Equitable Growth, Finance & Institutions and Director for the Prospects Group. “When declines in commodity prices are short-lived, policy stimulus can buffer their impact. However, when prices remain depressed for an extended period, policy makers need to find solutions so their economies can adjust smoothly to a new normal. Because of COVID-19, the new normal for oil-exporting emerging and developing economies arrived earlier. In the post-COVID world, these countries need to be more aggressive in implementing policies to reduce their reliance on oil revenues.”

Oil prices are expected to average $44 per barrel in 2021, up from an estimated $41 per barrel in 2020. Demand is expected to rise only slowly as tourism and travel continue to be held back by health concerns and as global economic activity is anticipated to return to pre-pandemic levels only in the year after next. Supply restraint is expected to be eased steadily.  Energy prices overall —which also include natural gas and coal—are expected to rebound sizably in 2021, following large declines in 2020, an upward revision from April’s forecast. A resurgence of a second wave of the pandemic that results in more lockdowns and less consumption, and delays in vaccine development and distribution, could lead to lower energy prices than forecast.

Metal prices are expected to post modest increases in 2021 after falling in 2020, supported by the ongoing recovery in the global economy and continued stimulus from China. A prolonged period of weak global growth would lead to lower prices than forecast.

Agriculture prices are expected to rise slightly in 2021, following an estimated 3% increase in 2020 following some shortfall in edible oil production. Concerns about food insecurity remain relevant in several emerging market and developing economies. These concerns are prompted by hits to incomes from the global recession, bottlenecks in food availability at the local level, and border restrictions that have constrained labor supply. Food price inflation has spiked in several countries.

The pandemic is only the latest in a long history of shocks to commodity markets. A Special Focus looks at the nature of commodity price shocks on 27 commodities during 1970-2019. It finds that highly persistent (“permanent”) and short-lived (“transitory”) shocks have contributed almost equally to commodity price variation, although with wide variety across commodities. Permanent shocks account for most of agricultural commodity price variability while transitory shocks are more relevant in industrial commodity prices. The varied duration of such shocks points to a need for policy flexibility.

 A transitory commodity price shock may call for stimulative fiscal policy to smooth consumption; countries that depend on exports of commodities subject to cyclical price swings may want to build fiscal buffers during the boom phase and use them in the bust period to support economic activity. In countries that rely heavily on commodities that are subject to permanent shocks, structural policies such as economic diversification and broadening the tax base may be needed to facilitate adjustments to new economic environments.

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Countries Raise the Sails on Offshore Renewables Sector

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Offshore renewables, including offshore wind, wave, tidal, ocean thermal, and floating solar PV, will witness substantial growth in capacity over the next decade and play an essential role in the global energy transformation. In this context, representatives from 40 countries gathered to identify collaboration areas and agree on concrete actions to accelerate progress and ensure rapid uptake of these promising technologies.

According to the International Renewable Energy Agency’s (IRENA) projections, global offshore wind and ocean energy installed capacity will reach 228 GW and 10 GW respectively by 2030.

During his welcoming remarks, IRENA Director-General Francesco La Camera stressed offshore renewables’ importance in meeting growing energy demands and improving living conditions. “Offshore renewables have the potential to meet more than four times the global energy demand of today, foster a blue economy, and bring socio-economic benefits to some of the most vulnerable areas to climate change such as small island territories and coastal areas,” he said.

The Collaborative Framework on Ocean Energy/Offshore Renewables first met on 25 June 2020, during which Members and States in Accession provided inputs on the thematic scope of the Collaborative Framework and agreed to include relevant stakeholders in future meetings. In response, this second meeting of the Collaborative Framework, moderated by H.E Ambassador ‘Akau’ola, Tonga’s Permanent Representative to IRENA, included participation, insights, and support from the Global Wind Energy Council (GWEC) and Ocean Energy Europe (OEE).

Currently, 90% of global installed offshore wind capacity is commissioned and operated in the North Sea and the nearby Atlantic Ocean. Mr. Ben Backwell, CEO of GWEC, attributed the rapid uptake of offshore wind in Europe to regional cooperation on interconnection, marine spatial planning (MSP), and sector coupling in the North Sea. Mr. Backwell highlighted the critical role that the Collaborative Framework can play in fostering similar regional partnerships in other parts of the world.

Representing the ocean energy sector in the Collaborative Framework, Mr. Rémi Gruet, CEO of OEE, suggested that ocean energy will become a game-changer, estimating that the sector can provide more than 1.2 million jobs worldwide by 2050. Mr. Gruet also underscored the predictability of ocean energy, which complements the variable renewable energy sources, as a compelling reason to make wave and tidal energy technologies essential additions to power systems that will be dominated by solar PV and wind.

Members also agreed on 13 topics of focus for the Collaborative Framework, around the areas of technology development, research and innovation, market incentives, and sustainability. The topics include analyses on accelerating technology cost reduction, grid integration, resource mapping, and coupling of offshore renewables with Power-to-X technologies. Participants also indicated the important role of IRENA and the Collaborative Framework in moving a global Offshore Renewables agenda forward in other relevant multilateral venues including the G20 and the COP26.

IRENA Members also agreed on modalities for future meetings under the Collaborative Framework, including the selection of Italy and Tonga as co-facilitators.

IRENA

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South Africa: industrial energy efficiency project wins international award

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South Africa’s largest energy efficiency initiative: Industrial Energy Efficiency Improvement in South Africa through Mainstreaming the Introduction of Energy Management Systems and Energy Systems Optimization, has won the highest international accolade for an energy programme – the International Energy Project of the Year – awarded by the global Association of Energy Engineers (AEE).

The project, which has been led by South Africa’s National Cleaner Production Centre (NCPC-SA) and the United Nations Industrial Development Organization (UNIDO) since 2010, received the award in recognition of its efforts to transform energy use patterns in South African industry and to mainstream energy management systems across economic sectors.

Since the project began in 2011, it has successfully trained 39 SANS/ISO 50001 lead auditors, held more than 320 training workshops, and achieved the participation of more than 150 large companies and 227 small and medium-sized enterprises. The project team has assisted industrial companies in saving 6.5 terawatt-hours (TWh) of energy, representing cumulative cost savings of R5.3 billion (270m.) for these companies.

The AEE’s International Awards recognize achievements in energy around the world. According to the organizers’ official communication, the awards identify those who exemplify the very best in their fields, and recognize the important work that is being done by individuals, organizations, agencies and corporations.

The AEE International Project of the Year award was accepted by national project manager, Alf Hartzenburg of the NCPC-SA, at the AEE International Virtual Awards ceremony. AEE members and executives from around the world responded with enthusiastic accolades when the summary of the IEE project achievements was read by the chairperson of the awards committee. 

The IEE project, currently its second phase, funded by the Global Environment Facility, is set to run until December 2021. Other IEE project phase II partners include South Africa’s Department of Trade, Industry and Competition, which funds the NCPC-SA, the Department of Energy and Mineral Resources and its agency, the South African National Energy Development Institute (SANEDI).

According to Hartzenburg, what sets this project apart is that it partners with and equips industry to tackle practical energy management in companies of all sizes.

He said, “Through expert-level training of industry professionals, demonstration of actual impact and methodologies aligned to international standard ISO50001, the project partners have ensured that both the skills and the appetite exist to implement energy management.”

Hartzenburg continued, “The benefits are made clear in the energy savings, which result in direct financial savings on utilities and other energy sources, and we don’t leave the companies to go it alone, but support them with skills and financial linkages, where possible.”

Hartzenburg believes that the return to post-lockdown operations offers companies an ideal opportunity to consider changes that will ultimately save them operating costs, thus aiding in the recovery process and long-term sustainability.

“SANS/ISO 50001, the energy management best practice standard, actually saves companies money. We are offering companies technical support to comply with this standard, and even some financial support if they want to apply for certification through the South African Bureau of Standards (SABS).”

Hartzenburg said his team is particularly proud of the huge environmental impact of the project. “Energy savings, particularly in a fossil-fuel based economy such as South Africa, have a direct climate mitigation benefit – which is why the GEF has funded our second phase.”

Based on internationally accepted calculations, the NCPC-SA reports that energy saved by companies through the IEE project has mitigated 6.4 million tonnes of carbon dioxide equivalent (CO2e) since April 2011 when the first savings were measured.

SANEDI is working with the information gathered through the NCPC-SA interventions, and is using them together with relevant international and national energy trends to inform national energy and policy planning, including the adaptation of the National Energy Efficiency Strategy.

Rana Ghoneim, head of UNIDO’s Energy Systems and Infrastructure Division, said the award was an excellent recognition of the strong ownership, committed leadership and multi-stakeholder partnership that is driving industrial energy efficiency in South Africa.  “The programme has always been a great example, inspiring other countries within the UNIDO global programme, where its impacts transcend beyond South Africa.”

The IEE project has a strong focus on gender mainstreaming and promoting the participation of women in energy. To date, 43% of the professionals trained through the project are female.

The project also includes awareness-raising in its activities, as evidence strongly supports the idea that sustained energy savings are brought about through behaviour change. This active communication approach made the project an even stronger candidate for the AEE International Award which encourages projects with “significant success in savings and/or visibility”.

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