Date: I +H' April, 2014
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The Government of the Republic of the Union of Myanmar Ministry of Livestock, Fisheries and Rural Development Union Minister's Office Ref: 1 /200(N)/1+h' 040/ nA l2gzz lzAM) Date: I April, 2014 Ms. Patricia Bliss-Guest Head, CIF Administrative Unit CTF Trust Fund Committee 1818 H Street Ir{W Washington, DC 2A433, USA Subject: Expression of Interest for Scaling Up Renewable Energy Program Dear Ms. Bliss-Guest: The government of Myanmar is pleased to submit this expression of interest (EOI) for SREP funding support. Myanmar exhibits a paradox of extreme energy poverty in a land of abundant energy resources. Renewable energy (RE) resources are sufficient to meet most daily energy needs, but less than half of the total population has access to electricity. Myanmar is the largest country in mainland Southeast Asia, but has one of the lowest population densities of the region, which imposes an inherent diseconomy of scale for conventional centralized electricity grid development and expansion. Electrification varies widely between urban and rural a.reas. Less than half the population has grid-supplied electricity, and the national power grid covers only 1Vo of 65,000 villages. Considering the broad distribution of abundant RE, resources: biomass, hydropower, solar, and wind. Myanmar has an opportunity to accelerate on- and off-grid electrification with RE, delivering universal electricity access much quicker than conventional centralized generation and grid expansion. Myanmar is confronted with a number of barriers that restrain energy development in general and RE development in particular. The govemment has recognized the need for a modern legal and regulatory framework to provide transparency and certainty which 2 are prerequisites for a viable commercial energy sector. Multi-lateral banks and other development partners are supporting the government's reform agenda. In March 2A14, the Myanmar Investor Forum on Renewable Energy Applications organized by Asian Development Bank (ADB) in collaboration with Ministry of Industry and the Ministry of Livestock, Fisheries, and Rural Development, highlighted energy access and development issues in the country. The forum provided a broad picture of how much investment is required from both the public and private sector for increasing energy access and finding financing mechanisms to lower barriers to investment. Multilateral banks and other development partners are supporting energy sector with major investments, but to date there is limited support for RE and small-scale rural energy projects. Based on participation and feedback at a recent investor forum, there is signiticant private sector interest, with local firms gearing up and forming joint ventures. Ministry of Livestock, Fisheries, and Rural Development and regional governments have begun to float tenders for off grid systems, and private firms are responding appropriately. SREP funding can provide timely support for: (i) strategic analysis for enabling policies, guidelines, and planning; (ii) targeted provision of concessional financing and credit enhancement instruments; and (iii) twinning and advice from regional peers that have scaled up RE programs. 'We look forward to favorable consideration of Myanmar's EOI. The Government is ready to prepare an Investment Plan with the support of the multilateral banks and other development partners, with a view to new SREP-supported project approvals and implementation beginning in 2015. Sincerely yours, *{-{a\,a For Union Minister Tin Ngwe Deputy Minister n of lnterest to Participate in SREP - Myanmar , I. COUruTNY RruO GOVENNMENT AGENCY SUAUITTIUC EXPRESSION OF INTEREST Country: Myanmar Agency: Ministry of Livestock, Fisheries, and Rural Development (MLFRD) Address; Office No 36, Nay PYi Taw, MYanmar Telephone/fax: +95(O)67-4 0827 1, +95(0)67- 409415, +95(0)67-409408 m ai I. com, i r. Email: i nfo. m |frd @g m ai I. com,kzaw. dda@q dtdltq @qmal!.qqm II. DESCruPTION OF THE COUNTRY AND ENERGY SCCTON CONTEXT Myanmar is geographically the largest country in mainland Southeast Asia with land .ou"6g" of O7O, SOg squaie kilometers; the estimated population is 52.80 million, with a populaiion Oensity of 8b people per square kilometer, one of the lowest in Southeast Asia. per capita gross domestic product (2012) is one of the lowest in the region at $857, compared io $1,015 in Cambodia, almost $1,400 in Lao PDR, and more than $5,500 in Thailand. IMF ranks Myanmar as one of the poorest countries, 162 out of 184: UNDp's Human Development lndex ranks Myanmar number 149 out of 187 . As of 2010, about afourth of the country's population lived in poverty'' Myanmar exhibits a paradox of extreme energy poverty in a land of abundant energy reiourcer. Renewable energy (RE) resources are sufficient to meet most daily energy needs, but less than half of tne total populationhas access to electricity. Per capita electricity consumption is 140 kilowatt-hours per year (kWh/y),one of the lowest in the region.M'ore thanTO% of the population is in rural areas, relying on biomass for cooking' Stightty over 4o/o of the population uses electricity for cociking.t About 7\ok of households depend on diesel lamps, batteries, or candles for lighting.tThe country's average a electrification grew from about 16% in 2006 to 28% in 2012. Electrification is concentrated in large cities: Yangon City has the highest electrification ratio (72%), folowed by Nay eyifaw (65%), (ayah (42%), and Mandalay (357").sOutside of urban areas, th; naiional power grid covers only 7% of 65,000 villages.According to preliminary estimates by the World Bank, achieving universal access to electricity would require investment of at least $400 million every year until 2030, well beyond existing public sector fiscal capabilities. Lack of access to reliable and sustainable energy in Myanma, is the most important energy sector challenge being faced by the government anO'it creates barriers to socio-economic development of the country. Considering the broad distribution of abundant RE resources, Myanmar has an opportunity to accelerate on- and off-grid electrification with RE, delivering universal electricity access much quicker than conventional centralized generation and grid expansion. Energy Resources vs. lnstalled Generation Capacities Myarffar has substantial fossil fuel resources and abundant renewable resources which remain largely untouched. As shown in Table '1, RE resources appear more than Agency, , Ministry of National planning and Economic Development, Swedish lnternational Development Cooperation United Nations Children's Fund, United Nations Development Programme.2011. lntegrated Household Livrng Manila Conditions Survey in Myanmar (2009-2010); and ADB. 2012. Asian Development Outlook 2012: Update. '1-2 2 UNDp Future Rurit Renewable Energy activities by UNDP (2013-2015), November 2012, Nay Pyi Taw .Ut\Op Nations Development Programme, Myanmar (ZOt f ) Accelerating Energy Ac-ess for All in Myanmar. United .- ii i" Oltinei as the numSer of e]ectrified households connected to the grid over the total number of households , ih. *th lowest electrification ratios are Yakhine (6%), Tannintharyi (9%), and Ayeyarwaddy (10%). "i".i , 2 Myanmar: SREP Expression of lnterest sufficient to meet 1OO% of electricity demand.6 The total installed generation capacity is dominated by hydropower and gas;actual generationin 2010-11 was estimated at 1,340 MW versus demand of 1,850 MW.?Off-grid electricitysupply is dominated by a network of 175 diesel generators supplying energy to 121 villages. Aside from hydropower, RE provides negligible electricity supply, with only 1'16 kW of solar energy, 519 kW of wind energy, 4 MW of biomass, and 1.6 MW of biogas capacity installed and operating in 2009. Table 1: Energy Potential and lnstalled Generation Capacity,2O10-2011 On-Grid Off.grid Total Resource Potential (MW) {MW) (MW) Rice husk (a.3 MVy) Lumber waste ('1 5 MVy) Bagasse (2.1Mlly) Biomass u 0 4 4 Molasses (A.2a MUy) Livestock waste (34 Mt/y) Jatropha (700 Mgal/y) Geothermal 93 prospective sites 0 0 0 200 potential sites Hydro 2,526 33 2.559 38 GW, 152 TWh/y 4.5- 5.5 kWh/m'ld Solar b I 0.'1 16 0 116 51 TWh/y technical potential Wasteto-enerqy 20 MW technical potential 0 0 0 Wind 365 TWh/y technical potential 0.519 0 0 519 Coal nla 120 0 120 Diesel nla 0 63 bJ Gas 334 Billion m" proven reserves 715 0 715 TOTAI. 3,361 {00 3,458 61ry=gigawatt, /d=kilowatt-hours per meter squared per day,day m =cubic meters, Mgal/y=p'1 gallons per year, MVy=rn;11;on tons per year, TWh/y=terawatt-hours per year Note: n/aCoal and diesel fuel supplies are limited by local production and import / intermodal trans-shipment capacities uMyanmar Sources: Engineering Society, 2A12 as cited in UNDP (2013) oUNEP (2013) Emission Profile in Myanmar; wind potential requires site-specific surveys for quantification III. RATIONALE FOR SELECTED SECTORS FOR SREP FITTNNCII.IC A number of barriers constrain energy development in general and RE development in particular. The government has recognized the need for a modern legal and regulatory framework to provide transparency and certainty which are prerequisites for a viable commercial energy sector. The government has also designated the Ministry of Livestock, Fisheries, and Rural Development (MLFRD) as the focal point for rural infrastructure including rural energy, and by implication RE development for rural energy access. Multi-lateral banks and other development partners are supporting the government's reform agenda. Table 2 summarizes key issues and how SREP-supported investments might address many of the barriers. 6Assuming an average electricity consumption target of 1000 kWh/person/year - which is about 10 times the current average per capita consumption - about 60 terawatt-hours per year (60 TWh/y) would meet 100% of demand including allowance for transmission and distribution system losses. tUrufR IZO1S; Emission Reduction Profile Myanmar. The difference in nominal installed capacity versus actual outpul indicates that many existing power plants are in need or rehabilitation and upgrade Final Version Myanmar: SREP Expression of Interest Table 2: Barriers to RE Deployment Bariiers , Mitigating lnteiventio'ns POLICY AND REGULATORY .