The International Finance Corporation (IFC) has pledged funds to develop Rangoon’s energy supplier, the Yangon Electricity Supply Board (YESB) into a “commercially viable corporate entity”.
The IFC, a member of the World Bank Group, signed a 26 February mandate with the Myanmar [Burma] Ministry of Electric Power to become a major shareholder in the currently state run YESB.
The mandate also pledges technical support and assistance to YESB in order to “expand business possibilities and increase domestic and international trade” via a sustainable power system in Burma’s financial heart, according to an IFC statement.
IFC Asia-Pacific vice-president Karin Finkelston said the agreement was,“a significant step that shows a firm commitment by the government of Myanmar to move forward with corporatizing the energy sector.”
Aung Khine, chairman of the YESB, said that with IFC’s assistance, the board could expect to become a regulated yet independent corporate electricity supplier.
“The IFC’s mandate involves making assessment to take a stake in the YESB, for power distribution in Rangoon,” he said.
IFC support for YESB comes under the umbrella of a US $2 billion pledge by the World Bank earlier this year, half of which was earmarked specifically for energy supply.
The gap between the demand for power and supply in Burma, particularly in Rangoon, is vast.
For Burma’s energy demands to be met, The Asian Development Bank has forecasted the need for a 42 percent increase in energy production for the domestic market.
The IFC is also advising the government on the bidding process for a 250MW combined cycle gas fired power plant in Myingyan, central Burma.