More than 450,000 people in rural Myanmar are expected to gain access to clean energy for the first time following the signing of a grant agreement between the World Bank Group and the Government of Myanmar.
The Results-Based Financing for Off-grid Solar grant agreement, worth US$3.45 million, is co-funded by the Global Partnership for Results Based Approaches (GPRBA) and the Energy Sector Management Assistance Program (ESMAP). The grant will be implemented by the Department of Rural Development which will provide sub-grants to the private sector to develop supply chains for quality solar products.
This innovative pilot will help develop a commercial market for Lighting Global-certified quality solar products and support sustainable growth of the off-grid lighting market in rural, remote areas of Myanmar. Half the population of Myanmar lacks access to grid electricity. In rural areas, where most people live, over two thirds of households rely on candles, kerosene, low-quality batteries and diesel generators to meet their energy needs.
“Energy access through off-grid solar technologies can play a key role in improving livelihoods and living conditions of people in rural areas,” said Mariam Sherman, the World Bank Country Director for Myanmar, Cambodia and Lao PDR. “The new grant will not only help deliver economic and social benefits for rural families, it will also contribute to social inclusion by providing affordable, quality solar products and by creating jobs through the expansion of supply chains in rural and remote areas.”
IFC – a member of the World Bank Group – supported the creation of the first commercial market for off-grid solar energy services in Myanmar under the Lighting Myanmar program, spurring the sale and financing of nearly 90,000 quality verified solar products. The grant funding will allow for further development of supply chains for quality lighting products in rural Myanmar, from companies to retailers and then onto consumers.
“This is timely support to help people and companies in Myanmar amid the impacts of COVID-19,” said Jane Xu, IFC Country Manager for Myanmar and Thailand. “Companies will be able to provide clean energy to those people in need, especially in rural and remote areas while creating jobs and income generation opportunities for retailers and local sales hubs, all to the people who need access to clean, affordable lighting.”
The funding will enable the poor to access end-user finance and post-sale services, helped by the pay-as-you-go mechanism that is being developed in Myanmar. IFC has provided support to help the private sector in Myanmar under the Lighting Myanmar initiative, through market research on people’s needs and willingness to pay for energy access, as well as on product quality assurance, support to business and access to finance.
The results-based financing (RBF) pilot, which aims to demonstrate a new private sector led business model for off-grid solar development, complements the World Bank-funded National Electrification Project (US$400 million IDA credit), which has provided electricity to more than 2 million people in Myanmar through grid, private sector led-mini-grid development and off-grid solar solutions for households, public institutions and street lighting implemented through public procurement.
Partnership with the private sector to develop off-grid solar solutions is critical for achieving the government of Myanmar’s universal energy access goal by 2030 as stipulated in the country’s National Electrification Plan.
About Lighting Myanmar:
Launched in 2016, the Lighting Myanmar project assists international and Myanmar-based companies in creating a sustainable market for Lighting Global quality-verified off-grid solar products in Myanmar. Drawing from experience in other Lighting Global programs, Lighting Myanmar works with product manufacturers, distributors, financial institutions, development partners, and the government in six areas: (1) quality assurance: (2) market intelligence; (3) business development support; (4) consumer education; (5) access to finance; and (6) regulatory and policy dialogue.
Solutions to accelerate renewables integration and power system resilience
Singapore and the International Energy Agency today co-hosted the second Global Ministerial Conference on System Integration of Renewables (SIR). The Conference was held as part of the Singapore International Energy Week (SIEW) 2020.
This is the first SIR Ministerial Conference to be held in Asia. Under the theme “Investment, Integration, and Resilience: A Secure, Clean Energy Future,” the SIR Ministerial Conference brought together close to 30 Energy Ministers, global CEOs and thought leaders to discuss emerging issues in the acceleration of renewables integration and power system resilience with a strong focus on Asia and Southeast Asia. The IEA also launched its new report on electricity security, Power Systems in Transition, at the Conference. The report provides important recommendations on modernising power grids for greater reliability and flexibility.
Singapore’s Minister in the Prime Minister’s Office and Second Minister for Trade & Industry, and Manpower and co-Chair of the SIR Ministerial Dr Tan See Leng said: “International cooperation and public-private partnerships remain vital as we navigate towards a more sustainable energy future. As we address the urgent need to future-proof our systems to create more resilience and flexibility, we must also increase the share of, and enhance the integration of renewable energy in our energy systems. We look forward to working with the IEA to advance global energy transitions.”
“The IEA is pleased to partner with Singapore for the 2nd Ministerial Conference on System Integration of Renewables as the country sits at the heart of Asia, a region that will be critical in shaping the future of global energy markets,” said Dr Fatih Birol, the IEA Executive Director. “Today, we shared important lessons from across Asia and beyond on how best to integrate growing shares of wind and solar into power systems while maintaining security of supply. This will be crucial if renewables are to become the fundamental cornerstone of global clean energy transitions.”
Singapore’s cooperation with the IEA has deepened significantly since it became an Association country of the IEA in 2016. Singapore and the IEA have co-hosted many innovative initiatives and programmes to advance the global energy agenda. These include the training programmes under the Singapore-Regional Training Hub, the Singapore-IEA Forum and the Capacity Building Roadmap on Energy Investment and Financing for ASEAN.
Impact of COVID-19 on Commodity Markets Heaviest on Energy Prices
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.
Countries Raise the Sails on Offshore Renewables Sector
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.
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