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.
The Global Partnership for Results Based Approaches (GPRBA) is a World Bank program at the forefront of testing RBF approaches that combine transformational funding and technical assistance. GPRBA helps improve delivery of basic services in developing countries by promoting lasting, productive, and efficient development approaches. Supported by co-financing from the public and private sectors, this pioneering partnership provides aid to areas and people who need it most, prioritizing recipients based on socioeconomic status.
The Energy Sector Management Assistance Program (ESMAP) is a partnership between the World Bank and 18 partners to help low and middle-income countries reduce poverty, boost growth through sustainable energy solutions, and accelerate the energy transition required to achieve Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable and modern energy for all. ESMAP’s analytical and advisory services inform the World Bank’s country financing and policy dialogue in the energy sector as well as the strategies and programs geared towards achieving WBG Climate Change Action Plan targets.