Yangon - The World Bank has approved a 140-million-dollar, interest-free loan to provide a modern power plant for Myanmar as part of its rural electrification drive, officials said Wednesday.
It is the financial institution's first major loan to the once-pariah country in more than two decades, the Bank's country manager Kanthan Shanker said.
The loan will go toward replacing the 40-year-old generator at the Thaton power plant in the Mon state, south-east of Yangon, with new modern gas turbines capable of producing 106 megawatts of electricity - a 250 per cent increase over the plant's previous capacity.
“Five per cent of the electricity produced from this plant will go to the national grid and rest will cover more than 50 per cent of the electricity needs of the state,” Shanker said.
The World Bank deliberately chose a provincial setting for its first major project in Myanmar, where almost 70 per cent of the population is without electricity.
“Less than 30 per cent of the populations in urban areas get electricity and only 16 per cent of rural population can get electricity, so we will focus on rural electrification which will help country's poverty reduction,” Shanker said.
Charles Schneider, resident representative of the International Finance Corporation, noted that 50 per cent of the country's gross domestic product (GDP) comes from rural areas.
The World Bank was one several international financial institutions that shelved lending programmes to Myanmar after the military brutally suppressed a pro-democracy movement in 1988, killing up to 3,000 protesters.
Under junta rule between 1988 to 2010, when Myanmar was the target of economic sanctions, the country was one of the lowest recipients of international aid worldwide.
The sanctions were largely lifted last year in the wake of significant political and economic reforms implemented by President Thein Sein. - Sapa-dpa