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IFC to lead sustainable hydro in Myanmar

The International Finance Corporation (IFC) has signed to advise the government on environmental and social risk management for hydropower projects nationwide.

The Yeywa hydrodam in Mandalay
The Yeywa hydrodam in Mandalay Region opened in 2011, though there are plans to add more such projects around the country.

By Aung Shin, Clare Hammond

Myanmar, October 3, 2015

Myanmar Times

This is the first time anything like this will be done in Myanmar. Commentators say they hope it will serve as the basis for transparent debate and decision-making in a sector that has been beset with controversies over displacement, ethnic conflict and environmental damage.

After recently approving a new electricity law, Myanmar is finalising procedures for environmental impact assessments. The IFC, part of the World Bank Group, will help to develop technical guidelines and will provide policy guidance and training to the Ministry of Electric Power (MOEP) and the Ministry of Environmental Conservation and Forestry (MOECAF).

Together they will commission a country-wide strategic environmental impact assessment (SEA) for the hydropower sector, said Kate Lazarus, team leader for the IFC’s Mekong sustainable hydropower program, which is funded by the Australian government.

“We’re working through an extensive work plan and will have an inception workshop in the coming months to lay out the main activities,” she told The Myanmar Times.

“We aim through the SEA to map all the key hotspots for critical habitat, biodiversity and ethnic minority areas. We will overlay that with planned and potential future hydropower projects, to ensure projects are developed in the most sustainable way.”

The IFC will also open a Hydropower Developers Working Group for current and future private sector developers, said Ms Lazarus. “There’s been a lot of initial interest, especially from those thinking about investing in Myanmar.” Developers of suspended projects such as CPI Yunnan International Power Investment Company (CPIYN) will also be involved.

The IFC will collaborate with the government, NGOs, the private sector and development partners, and will speak with as many groups as possible to share its initial plans, said Ms Lazarus. “We will seek advice as to how [stakeholders] would like to be involved in the process, and ensure that we’re taking all the views into consideration.”

This will be of the utmost importance due to legacy issues that have contributed to mistrust, she said. “We are not necessarily in a position to address these but we will certainly learn from them.”

For many years, environmental groups in Myanmar have called on the government to halt hydropower projects on major rivers, citing their negative impact on environmental and social security.

Civil society groups are also concerned that power will be exported to neighbouring countries, and local communities will suffer without seeing any benefits. Many projects signed by the previous military government have since been suspended due to strong local opposition.

This is a chance for a fresh start, said U Hein Htet, deputy director general at MOEP, in a press release yesterday. “We have an opportunity now to push hydropower development in the right direction. We want hydropower projects in Myanmar to set new standards and to meet good international and industry practices.”

A nationwide SEA is very necessary, said Vicky Bowman, director of the Myanmar Centre for Responsible Business (MCRB). The IFC Performance Standards and Environmental Health and Safety Guidelines are the “gold standard”, she said, and would be a welcome addition to Myanmar law, particularly on issues such as resettlement and indigenous peoples.

“I certainly hope it will be successful, and lead to the Myanmar government making decisions about individual projects, on the basis of sound and transparent analysis.” It will be an opportunity to put pipeline projects on hold – many of which are only at the pre-feasibility or feasibility stage.

“The clock can be stopped until the Myanmar government has received the IFC’s independent expert advice on the social and environmental risks of each project. This advice can serve as the basis for a transparent debate and decision-making,” said Ms Bowman.

However, MOEP’s U Hein Htet told The Myanmar Times yesterday that the joint agreement is just for technical assistance and will have no impact on existing hydropower contracts.

Some groups are concerned that the agreement has been signed with limited public information available. “This is falsely making hydropower look green and renewable, but how can the IFC guarantee that the hydropower boom is benefiting communities?” said Pianporn Deetes, Thailand campaign coordinator for non-profit International Rivers.

Ms Deetes believes that for now, as 70pc of the Myanmar population is living in off-grid rural regions, small scale and decentralised energy sources are better ways to meet growing energy demands.

Seemingly in contrast to this idea, the IFC said in yesterday’s press release that Myanmar is only tapping into less than 5000 megawatts of its 100,000MW hydropower potential, but that “unleashing this potential could turn Myanmar into the largest energy producer in the region with the ability to supply electricity to neighboring countries”.

A number of development partners such as the World Bank, the Asian Development Bank (ADB) and the Japan Investment Cooperation Agency (JICA) are advising and funding the government to help reach its target of 50pc electrification by 2020 and 100pc by 2030.

Currently 34 million people, or around 66pc of the population, has no access to electricity, one of the lowest rates of electrification in Southeast Asia. Reaching these ambitious goals will involve a number of strategies such as boosting generation, transmission and distribution, off-grid energy solutions, planning, financial sustainability and regulatory development.

An Electricity Master Plan drafted with the help of JICA is almost complete. The plan states that 100pc electrification will require a mix of energy sources including hydro, gas, coal and renewable energy. Hydropower currently accounts for 65pc of generation, gas power 33pc and coal 2pc of the present installed capacity of 4840MW. The country has no renewable energy sources at present.

By 2020, hydro will be reduced to 54pc, gas and coal power to 22pc each and renewable energy will account for 2pc of total capacity, which will be 8815MW, MOEP sources previously told The Myanmar Times.

In 2030, hydropower will only account for 38pc of the total, while gas power will be 20pc, coal 33pc and renewable energy 9pc. Total installed capacity will climb to 23,594MW.

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