RANGOON — A visiting World Bank Group delegation said it will support public and private sector investment in Burma’s underdeveloped power infrastructure, as the sector is imperative to spurring economic growth and reducing poverty.
“Connecting people and businesses to a reliable electricity grid is critical for Myanmar to realize its enormous social and economic potential,” said Jin-Yong Cai, executive vice president of the World Bank Group’s International Finance Corporation (IFC).
“IFC is working with the government to establish a strategy that will promote investment in the power industry,” he said in a press release on Tuesday.
Cai was among a high-level World Bank Group delegation visiting Burma. Its members met with President Thein Sein, opposition parliamentarians — including NLD leader Aung San Suu Kyi — civil society organizations and private sector representatives.
The press release noted that only a quarter of all Burmese have access to reliable electricity and improving this supply “requires large investments from both the public and private sectors.”
Cambodia’s population has similar rates of electricity access as Burma, but in neighboring Laos 80 percent of the people is connected to the grid.
“We can work with the government of Myanmar to provide risk guarantees to investors. This would help them obtain financing at competitive rates, speeding up project implementation,” said Michel Wormser, vice president of the group’sMultilateral Investment Guarantee Agency.
The World Bank Group said it is providing US $165 million in zero-interest loans to Burma to support priority areas, such as the power sector, projects relating to the peace process and government investment.
Another $80 million is earmarked for improving schools, clinics, roads and water supply through community organizations. IFC is also supporting the development of microfinance institutions in Burma.
The bank has projected GDP growth in Burma to climb to 6.3 percent this year, up from 5.5 percent in 2012.
The World Bank, the Asian Development Bank (ADB) and the International Monetary Fund (IMF) began reengaging with Burma early last year, after political and socio-economic reforms under President Thein Sein’s got under way.
On Jan. 27, foreign creditor countries decided to clear more than $6 billion in Burmese debt and arrears payments, in order to show their support for the reforms. The debt cancellation allowed the World Bank and ADB to resume lending to Burma and they promised a total of about $900 million in fresh loans.
Under the previous military junta Burma had fallen behind on its arrears payments and it became cut off from new loans.
A high-level IMF delegation is currently also wrapping up a visit to Burma and it discussed ongoing economic reforms with the Minister of Finance, the Central Bank of Myanmar and civil society groups, according to an IMF press release.
“Myanmar has embarked on a historic set of reforms to modernize and open up its economy. Managed well, these reforms will facilitate strong and inclusive growth that reduces poverty,” said Anoop Singh, director of the IMF’s Asia Pacific Department.
The IMF noted that macroeconomic reform measures, such as the managed float of the exchange rate of Burma’s currency the kyat, was already producing positive results.
The fund said it would seek to intensify its cooperation with Burma and open a representative office in Rangoon in the near future.
Additional reporting by Paul Vrieze.