IFC and the Government of Myanmar to Improve Environmental and Social Standards in Hydropower Projects

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The FINANCIAL — IFC, a member of the World Bank Group, on September 22 signed an advisory services agreement with the government of Myanmar to help improve environmental and social risk management in hydropower projects. 

In Myanmar, 34 million people, or about 66 percent of its population, do not have access to electricity. To address this constraint, the government has set a target of increasing the electrification rate to 50 percent by 2020. The World Bank Group is supporting this effort through financial assistance to both the public and private sectors to help increase generation capacity, expand the distribution grid, and upgrade power supply facilities in both rural and urban areas, according to IFC.

A big factor in increasing Myanmar’s electricity generation capacity is to sustainably develop its massive 100,000 megawatts of hydropower potentials. Currently, the country is only tapping into less than 5,000 megawatts of its hydropower capacity. Unleashing this potential could turn Myanmar into the largest energy producer in the region with the ability to supply electricity to neighboring countries. 

“We have an opportunity now to push hydropower development in the right direction,” U Hein Htet, Deputy Director General, Department of Electric Power Planning, Ministry of Electric Power, Union of Myanmar. “We want hydropower projects in Myanmar to set new standards and to meet good international and industry practices.” 

With IFC’s support, Myanmar’s Ministry of Electric Power and Ministry of Environmental Conservation and Forestry will develop much-needed technical guidelines to address environmental and social risks in hydropower projects. Myanmar has recently approved a new electricity law and is finalizing the procedures for environmental impact assessment. 

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“To develop hydropower sustainably, we need to cultivate the know-how on environmental and social risk management,” said U Nay Aye, Director General, Environmental Conservation Department, Ministry of Environmental Conservation and Forestry, Union of Myanmar. “Over the next two years, we are going to focus on building capacity to ensure the sustainable development of our hydropower sector in the long run.” 

As part of the cooperation agreement, IFC and the Myanmar will commission a country-wide strategic environmental assessment of the hydropower sector. IFC will also provide policy guidance and training on other important areas, such as environmental flows management, benefit-sharing arrangements, and stakeholder engagement. 

“The World Bank Group wants to play a pivotal role in supporting the development of a sustainable hydropower sector, as part of its efforts to help Myanmar achieve a balanced energy mix,” said Vikram Kumar, IFC Myanmar Resident Representative. “We will incorporate international best practices while assisting the government in developing environmental and social guidelines for the hydropower sector. We will also encourage greater collaboration between the public and private sectors as well as civil society so that developers can help shape policy and contribute to improving environmental and social risk management in Myanmar’s hydropower development.” 

IFC’s efforts to promote a more sustainable hydropower sector in Myanmar builds on lessons learned from its work in Lao PDR. Since 2012, IFC has been working with the government of Lao PDR, hydropower companies and banks to improve risk management and address environmental and social issues associated with hydropower development. The hydropower program in Myanmar, funded by the Australian government, began in January this year.

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