On 4 November 2020, in the Republic of the Union of Myanmar (hereinafter “Myanmar”), H.E. Mr. MARUYAMA Ichiro, Ambassador of Japan to Myanmar, and H.E. U Maung Maung Win, Deputy Minister for Planning, Finance and Industry of Myanmar, exchanged Notes concerning two Yen Loan projects (1) The East-West Economic Corridor Highway Project (New Bago-Kyaikhto Highway Section) and (2) The Project for the Development of Finance for Small and Medium-Sized Enterprises (Phase-3) worth a total of 42,779 million Japanese Yen. The outline of the projects is as follows;
1 Outline of the Projects
(1) The East-West Economic Corridor Highway Project (New Bago-Kyaikhto Highway Section)
(The maximum amount of the project is 27,779 million Japanese Yen (about 265 million USD))
East-West Economic Corridor is a route that crosses Vietnam, Thailand, Laos and Myanmar and is the main route that connects Thailand and Myanmar via land. Since the volume of trade with Thailand, the largest trading partner with Myanmar, is expected to continue to increase, it is essential to develop the East-West Economic Corridor to enhance the logistics sector’s efficiency. Besides, there is an urgent need to increase the number of engineers well trained to maintain improved roads and bridges in Myanmar. Therefore, it is an imminent issue to renovate the facilities and equipment at the Central Training Centre (Thuwunna), the country's primary technical training institution, which has been aging.
This project will construct a new bridge on the bypass road along Bago-Kyaikhto road in the East-West Economic Corridor, where the traffic is expected to increase rapidly. The project will also renovate the Central Training Centre (Thuwunna) to strengthen the maintenance system of roads and bridges. Through construction and renovation, it will enhance domestic and international logistics efficiency, which contributes to the sustainable development of Myanmar.
(2) The Project for the Development of Finance for Small and Medium-Sized Enterprises (Phase-3)
(The maximum amount of the project is 15 billion Japanese Yen (about 144 million USD))
Most SMEs, the primary business bodies in Myanmar, have long been facing difficulties in getting capital funds through loans from financial institutions due to restrictions such as borrowing conditions. The spread of the new Coronavirus disease 2019 (COVID-19) further stroke SMEs with insufficient cash on hand.
This project will provide funds for SMEs by Medium and Long-term loans with flexible terms on collateral as well as support for financial institutions' capacity development. These supports aim to smoothen financial intermediaries' function related to SMEs and maintain and expand SMEs' production and investment in Myanmar. The project will help mitigate the economic impacts due to COVID-19, contribute to the sound development of the country’s industrial and business sector, and create and retain the employment opportunities.
2. Loan Terms
(1) Interest Rate : 0.01 % per annum
(2) Repayment Period : 40 years (Including 10 years grace period)
(3) Procurement term : General Untied