The Asian Development Bank (ADB) has concluded a deal with the Myanmar government according to which the multilateral bank will provide $1 billion in loans, equity investments, guarantees and trade financing directly to private companies and projects in the country.
The money will be channeled into investment projects until 2016 in areas including logistics and connectivity, power generation, telecommunications, urban development, the financial sector and trade finance.
“It was difficult to reach an agreement,” said Maung Maung Thein, Myanmar's Deputy Minister for Finance, in a statement. “It took about two years to get the agreement after lawyers and the analysts studied the situation. It is a beginning to help domestic stock exchange companies because international stock exchange companies will enter to market soon after the enactment of stock exchange law.”
ADB director Christopher Thieme commented that the loan would be distributed immediately after the signing and that the interest rate would depend on the market price.
“The role of private sector investment in meeting infrastructure financing requirements and providing important expertise and technology is critical,” ADB vice chairman Stephen Groff added during the signing ceremony.
The development finance institution, which has previously lent $1 billion to Myanmar's public sector, estimates that the investment gap that needs to be filled by the Southeast Asian nation to maintain high economic growth and achieve middle-income country status by 2030 stands around $80 billion.
Thieme hinted that more loans could be provided if the project turns out to be successful.