Japan Exchange of Notes on 4 Projects worth 120, 915 million Yen (approx. 1.1 billion USD)
21 January 2020

1. Mr. MARUYAMA Ichiro, Ambassador of Japan to the Republic of the Union of Myanmar and U Maung Maung Win, Deputy Minister for Planning, Finance and Industry signed, the Exchange of Notes for the following four Yen Loan Projects, which will be implemented with the loan worth about 120, 915 million Yen, in Nay Pyi Taw in 21 January 2020.

2. The outline of the projects

(1) Providing Loan to Yangon Sewerage System Development Project in Yangon
The project will provide funds to renovate so as expand waste water treatment plants, to construct sewer pipes and to improve the living environment of local residents in the central business district of Yangon, where about 10% of Myanmar's population reside. Currently, most of human waste, domestic wastewater and wastewater from commercial entities flows into the river untreated, causing water quality deterioration. By implementing this loan project, the capacity to treat the wastewater will be increased up to about 7 times by 2030 (two years after project completion), and the amount of wastewater treatment is expected to be about 130 times of the current amount. It is expected that the project will support the improvement of the living environment of the local residents.
(Maximum amount of the project is 45,900 million Yen)

(2) Providing Loan to Urban Development Project for the reduction of traffic congestion and the damages affected by the flood in Yangon
This project will provide funds to improve drainage, take measures against traffic congestion at level crossings on main roads and Yangon Circlar Railway Road in Yangon, the largest city of Myanmar which has high economic growth. In the Yangon metropolitan area, there is fivefold increase in the number of registered motor vehicles registration due to high economic growth, and the traffic congestion has been serious for a long time. In addition, due to the poor and capacity of existing drainage channels, floods occur during the rainy season, and it causes the deterioration in the traffic environment of the region and threatens the safety of citizens' lives. With this loan, about 1/3 of the main drainage channels of the region will be improved the measures for traffic congestion and traffic safety at the main roads and Yangon Circular Railway Road will be taken. Therefore, it is expected that the project will contribute to the economic and social development of Yangon City.
(Maximum amount of the project is 24,085 million Yen)

(3) Providing Loan for the Power Distribution Improvement Project in Yangon and Mandalay
This project will provide funds to repair and expand the electricity distribution network to improve the power supply in Myanmar’s major commercial cities, Yangon and Mandalay. In Myanmar, power demand has been increasing rapidly due to recent developments and investments. In 2017, the maximum power demand was about 3,075 MW nationwide. In 2020, power demand is expected to increase up to 4,531MW and the Myanmar government is planning to increase the amount of power supply. However, the renovation and the improvement of power distribution equipment has been delayed, and it is expected that there will be many power distribution facilities exceeding their capacity in 2020. Therefore, there is an urgent need to renovate and expand the power distribution facilities. With this loan, the distribution loss rate will be decreased by 1% in each city and reduce power outages caused by the unsufficient capacity of the distribution facilities. Eventually, it is expected that it will contribute to the economic development of Myanmar and the improvement of the citizens’ lives, mainly in Yangon and Mandaly.
(Maximum amount of the project is 12,288 million Yen)

(4) Providing funds to the Regional Infrastructure Improvement Project in Chin, Rakhine, Mon and Kayin States and Tanintharyi Region
This project will provide funds to improve the lives of local residents through new construction, renovation and installation of basic infrastructure necessary for life such as roads, bridges, electric power and water supply in rural areas of Myanmar. The poverty rate in Myanmar is the highest in Chin State (73.8% poverty rate) and Rakhine State (43.5% rate), and the electrification rate and water supply rate are low. The development of basic infrastructure has been an challenge for the economic development in the States and Regions with higher poverty rates. In addition, the development of those regions is emphasised in the “Ayeyarwady, Chao Phraya and Mekong Economic Cooperation Strategy” (ACMECS), and it is important to promote the stady economic development in the rural areas, through the basic infrastructures development in Mon, Kayin States and Tanintharyi region, situated along the East-West Economic Corridor and the South Economic Corridors and expected to be improved in the future. With this loan, 70 sub-projects (Roads & Bridges: 35, Electricity: 25 and Water Supply: 10) will be implemented to improve the lives of local residents from those regions and to contribute to the stable socio-economic development in rural areas.
(Maximum amount of project is 38,642 million Yen)

3. These projects are part of the implementation of the commitment of 800 billion Yen private-public assistance, which Prime Minister Abe Shinzo stated during the meeting with State Counsellor Daw Aung San Suu Kyi in November 2016, within five years.