Washington, United States of America – The World Bank 2005-05-23 approved a Credit to the Republic of Yemen for SDR35 million (US$50 million equivalent) to help finance the Power Sector Project. The objectives of the Project are to relieve critical power supply constraints and enhance the overall technical efficiency and quality of electricity supply by supporting the Republic of Yemen’s power sector reform initiatives and strengthening the sector’s corporate governance to improve the efficiency of the Public Electricity Corporation.

Yemen is the least electrified country in the MENA region, with only about 40% of the total population having access to electricity. In rural areas, the electrification rate is very low at only about 20%. More than half of the rural power supply comes from cooperatives, the private sector, and auto-generation, and not from the Government-owned Public Electricity Corporation system.

The low access and the absence of reliable electricity supply have been recognized as severe constraints to economic growth in Yemen, and to the achievement of the Government of Yemen’s poverty alleviation objectives.

“Economic growth and a better quality of life for the Yemeni people will be realized with adequate access to reliable electricity services”, commented Somin Mukherji, Project Task Team Leader.

The Government of Yemen’s long term vision for the power sector is to ensure sustainable sector development that would be able to meet the country’s rapidly growing electricity needs essential for speedy economic development and to create an adequate incentive that will attract private investments in the generation and distribution of electricity.

The Project’s primary social impact would be improved quality of service through a reduction in the frequency and severity of power outages, achieved through increased system reliability owing to investments in Public Electricity Corporation’s generation, rehabilitation, transmission and distribution systems.

The Credit for the Power Sector Project follows standard IDA terms and has a 40 years maturity, including a 10-year grace period.