News & Views

Beijing, 17 September, 2007 -- The World Bank and one of the largest State-owned Chinese power companies, China Southern Power Grid Company, have signed an agreement aimed at accelerating implementation of the regional energy market in the Greater Mekong sub-region (GMS) of south-east Asia.

At a signing event in Beijing, the World Bank’s Vice President for the East Asia and Pacific region, Mr. Jim Adams, described the Memorandum of Agreement with China Southern Power Grid as an important element in the ongoing effort to develop a strong regional power trade and to deliver economic and environmental benefits to the Greater Mekong region’s 315 million people.

“Along with the obvious benefits of cheaper and more reliable electricity, a strong regional power trade can also enhance energy security, reduce oil dependence and replace fossil-fuel based power generation by renewable resources,” Mr Adams said. “We recognize these benefits of regional power trade and the need for closer cooperation to reach this goal.”

Mr Adams said interconnecting the national electricity systems of the Mekong and establishing a market for buying and selling electricity will help GMS countries to use their energy resources more efficiently, make power supply more reliable, and support rapid economic growth. Less developed but resource-rich smaller GMS countries will be able to attract investments to generate revenue for poverty alleviation and improve access more quickly.

“In Cambodia, where electricity access is less than 20 percent of the population, and very high cost because of dependence on diesel generation, electrification of the country can be accelerated by importing power from neighboring Mekong countries,” said Mohinder Gulati, lead energy specialist for the World Bank’s East Asia and Pacific region. “Lao PDR with very large hydropower resources can become the powerhouse of the region and generate revenues to fast-track its development. Vietnam and Thailand will be able to import electricity from southern China.”

To strengthen regional power trade the Bank is working through the regional forum sponsored by the Asian Development Bank.

Under the agreement, the World Bank and China Southern Grid will work together to:

• Promote appropriate regional power trade policies and practices through the GMS forum
• Provide relevant technical assistance and expertise to develop technical capacity of the GMS regional electricity market participants
• Help CSG obtain global knowledge the Bank has gathered from its work in other regional electricity markets
• Pioneer new financial instruments, markets and institutions aimed at strengthening the regional power trade.