"The World and Japan" Database (Project Leader: TANAKA Akihiko)
Database of Japanese Politics and International Relations
National Graduate Institute for Policy Studies (GRIPS); Institute for Advanced Studies on Asia (IASA), The University of Tokyo

[Title] Signing of Exchange of Notes concerning Yen Loan to Myanmar

[Date] May 26, 2013
[Source] Ministry of Foreign Affairs of Japan
[Full text]

1. On May 26 (same date local time), Mr. Mikio Numata, Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of the Union of Myanmar, and H.E. Dr. Lin Aung, Deputy Minister for Finance and Revenue of the Republic of the Union of Myanmar, signed an Exchange of Notes concerning three yen loan projects. The total amount of the projects is up to 51,052 million yen.

2. Outline of the projects

(1) Regional Development Project for Poverty Reduction Phase 1 (maximum 17 billion yen)

Infrastructure construction in Myanmar remains at a lower level than other ASEAN nations and infrastructure construction in rural areas has become an urgent task in particular.

This project aims at newly building and rehabilitating basic infrastructure (roads, electricity, water supply, etc.) in seven regions and seven states of Myanmar. Through implementation of this project, improvement of quality of life of residents in rural areas and contribution to development and reduction of poverty in the rural areas are expected.

(2) Urgent Rehabilitation and Upgrade Project Phase 1 (maximum 14,052 million yen)

Power shortage has been a serious problem in Myanmar. In particular, in the dry season when hydroelectric energy is reduced, rotational planned blackouts are carried out. Thus, the tight electricity situation influences economic and social activities. Along with intensified economic activities in Yangon urban area including the Thilawa Special Economic Zone, further increase in demand for power is expected, and establishment of a stable power supply system has become an urgent issue.

This project aims at increased and more efficient power output through rehabilitation of thermal power stations and substations in Yangon urban area. Through implementation of this project, improvement of power supply conditions and contribution to the sustainable economic growth of Myanmar are expected.

(3) Infrastructure Development Project in Thilawa Area Phase 1 (maximum 20 billion yen)

The Thilawa Special Economic Zone (hereinafter referred to as "SEZ") located in the vicinity of Yangon has advantages such as rich manpower and accumulation of existing industries, as well as availability to utilize an existing port. The Government of Myanmar expressed its intention to preferentially develop this area. However, infrastructure has not been developed in the planned construction site of the SEZ and construction of internal and peripheral infrastructure of the SEZ is an important task in order to promote the business of enterprises at the site.

This project aims at preparing electricity power-related plants (power generation, transformation of electric energy, transmission and distribution of energy, etc.) so that sufficient electric power can be supplied to Thilawa District and, at the same time, expanding the port to deal with increasing demand for container cargos. Through implementation of this project, promotion of direct investment to the district, development of Yangon urban area including the SEZ and creation of employment in the area, and contribution to the sustainable economic development of Myanmar are expected.

3. Terms and conditions of the loan

(1) Interest: 0.01% per annum

(2) Repayment period: 40 years (including a 10-year grace period)

(3) Procurement method: General untied