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In this Sept. 24, 2013 photo, a family eats a meal in a house illuminated by candlelight in Dhala, a suburb of Yangon, Myanmar. The World Bank announced on Wednesday, Sept. 25, it is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country s chronic power shortages. Myanmar only recently emerged from a half-century of military rule and isolation. Even in urban areas, more than 70 percent of people are without electricity.
YANGON, Myanmar—The World Bank is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country's chronic power shortages.

Myanmar, which exports natural gas to neighboring Thailand under contracts signed by its former military government, has suffered an energy deficit for years.

The World Bank said Wednesday the interest free loan will fund a refurbishment of the Thaton gas-fired power plant, increasing its generating capacity by 250 percent without an increase in its gas consumption.

It is the first World Bank loan to Myanmar since the development lender forgave $440 million of unpaid debt in January.

Electricity and telephone cables hang above an entrance of a downtown apartment in Yangon, Myanmar, Wednesday, Sept. 25, 2013. The World Bank announced on
Electricity and telephone cables hang above an entrance of a downtown apartment in Yangon, Myanmar, Wednesday, Sept. 25, 2013. The World Bank announced on Wednesday it is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country s chronic power shortages. Myanmar only recently emerged from a half-century of military rule and isolation. Even in urban areas, more than 70 percent of people are without electricity. ((AP Photo/Gemunu Amarasinghe))

Myanmar only recently emerged from a half-century of military rule and isolation, during which time its once promising economy withered. More than 70 percent of people are without electricity.

A lack of funds, rising demand for energy , aging hydroelectric plants and poor grid infrastructure have resulted in frequent power cuts and rationing of electricity during the hot summer months when hydro power generators cannot operate at full capacity due to depleted reservoirs.

"It affects industries, it affects common people, kids cannot study at night because they do not have electricity," said Kanthan Shankar, World Bank country manager for Myanmar.


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The bank said the 106 megawatt Thaton plant will provide 5 percent of peak power demand for the entire country and 50 percent of peak demand in Mon state.

Power shortages led to protests early last year in several cities. The government made an uncharacteristic appeal for understanding, saying that rationing was required to cope with greater demand.

A security guard of a downtown apartment drinks tea while standing in front of an electrical fuse-box in Yangon, Myanmar, Wednesday, Sept. 25, 2013. The
A security guard of a downtown apartment drinks tea while standing in front of an electrical fuse-box in Yangon, Myanmar, Wednesday, Sept. 25, 2013. The World Bank announced on Wednesday it is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country s chronic power shortages. Myanmar only recently emerged from a half-century of military rule and isolation. Even in urban areas, more than 70 percent of people are without electricity. ((AP Photo/Gemunu Amarasinghe))

In this Sept. 24, 2013 photo, a rickshaw driver illuminated by the lights of passing vehicles waits for passengers in Dhala, a city which has no grid-based
In this Sept. 24, 2013 photo, a rickshaw driver illuminated by the lights of passing vehicles waits for passengers in Dhala, a city which has no grid-based electricity, in the suburbs of Yangon, Myanmar. The World Bank announced on Wednesday, Sept. 25, it is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country s chronic power shortages. Myanmar only recently emerged from a half-century of military rule and isolation. Even in urban areas, more than 70 percent of people are without electricity. ((AP Photo/Gemunu Amarasinghe))

In this Sept. 24, 2013 photo, a merchant in a night market uses battery powered portable lamps to illuminate her vegetable stand in Dhala, suburbs of
In this Sept. 24, 2013 photo, a merchant in a night market uses battery powered portable lamps to illuminate her vegetable stand in Dhala, suburbs of Yangon, Myanmar. The World Bank announced on Wednesday, Sept. 25, it is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country s chronic power shortages. Myanmar only recently emerged from a half-century of military rule and isolation. Even in urban areas, more than 70 percent of people are without electricity. ((AP Photo/Gemunu Amarasinghe))

In this Sept.  24, 2013 photo, a student does his homework in a house illuminated by candlelight in Dhala, suburbs of Yangon, Myanmar. The World Bank
In this Sept. 24, 2013 photo, a student does his homework in a house illuminated by candlelight in Dhala, suburbs of Yangon, Myanmar. The World Bank announced on Wednesday, Sept. 25, it is lending Myanmar $140 million to upgrade an aging power plant in southeastern Mon state in a small step toward overcoming the country s chronic power shortages. Myanmar only recently emerged from a half-century of military rule and isolation. Even in urban areas, more than 70 percent of people are without electricity. ((AP Photo/Gemunu Amarasinghe))