Lessons Learned from Lao PDR in Developing Hydropower in Myanmar
As Myanmar works to build a hydropower sector, IFC experts say involving the private sector from the get-go and drawing from the experience of resource-rich neighboring countries such as Lao People's Democratic Republic will be the right move for the country that just emerged from decades of isolation two years ago.
“In Lao PDR, the private sector is only now getting into discussions on policy and regulation,” said Kate Lazarus, IFC Senior Operations Officer in charge of the hydro program in the Mekong region. “If developers would have been involved systematically from the get-go, their insight and expertise would have contributed to implementable policy. As we begin our work in Myanmar, we want to take with us the lessons we’ve learned from Lao PDR.”
Only 29 percent of Myanmar’s population has access to electricity, but the country’s potential of hydropower is the highest in Southeast Asia, topping 100,000 megawatts; if realized, the energy produced will benefit six million people, helping Myanmar fulfil its domestic electricity needs.
“We want to enable great companies to invest in hydropower in Myanmar, as its potential for generating electricity is huge,” said Vikram Kumar, IFC’s Resident Representative in Yangon. “We hope to work with the government to develop good international industry standards and guidelines for the sector, which should involve the private sector.”
One way to move forward with Myanmar’s hydropower sector is to bring in quality developers like SN Power, a Norway-based investor in renewable energy in emerging markets. The company has extensive experience developing hydropower in countries including Chile, India, Nepal, Panama, Peru, the Philippines, Sri Lanka, and Zambia. In April this year, SN Power took part in the Norway-Asia Business Summit in Myanmar, a high-level meeting place between Norwegian businesses with an interest in the emerging economy and relevant government agencies. SN Power plans to invest in hydropower projects in Myanmar.
“We will apply lessons learned and experiences from our best-practice countries, including the use of IFC’s sustainability standards,” said Halvor Lauritzsen, Vice President of SN Power. “It is essential to encourage other developers to maintain the same commitment to setting standards in environmental and social analyses and assessments, as well as the management of their internal environmental and social systems.”
In neighboring Lao PDR, hydropower development has been increasing since 1995. The government has 18 projects under construction by independent power producers and has signed around 200 memorandums of understanding with small hydropower developers that plan to provide hydroelectricity to a growing domestic market and export to neighboring countries.
As Myanmar develops its hydropower sector, Kumar said the government has become increasingly aware of the negative impact of projects that lack environmental and social standards as well as the need to devise policies that ensure the sustainable development of hydropower.
“Due to its current development rush, Myanmar has the advantage of being able to select quality projects that support sector development and adhere to good practice,” said Kumar. “Looking at possible projects through a sustainability lens will be critical to making sure the best projects are developed.”
Lazarus said there is a need to work closely with the government and local stakeholders to build capacity, improve coordination and apply lessons learned from Lao PDR smartly.
“We need to acknowledge the local circumstances and ensure all policy and technical guidelines are aligned with Myanmar’s context,” said Lazarus.