The Multilateral Investment Guarantee Agency has pledged $105.74 million to a large-scale fibre optic cable project in Myanmar.
The guarantee will provide insurance coverage for a $100 million loan provided by Bank of China to Myanmar Fiber Optic Communication Network, the country’s largest developer in the field.
Combined with an $18.6 million equity investment by Shenzhen-based network infrastructure builder HyalRoute, the money will be used to fund the development of 4,500km of fibre optic cables. The guarantee covers the loan for up to five years against the risks of currency inconvertibility, transfer restriction, expropriation, and war and civil disturbance.
The project, estimated to cost $118.6 million, will connect 66 cities and towns in 10 states and six metropolitan areas across Myanmar’s central and southern regions. It is also part of a 32,000km cable network the country aims to build in the decade to 2023. MIGA said over half of the plan has already been completed.
The Southeast Asian country had been among the least connected regions in the world for years, due to fragility, conflict and violence, MIGA said. In 2013, less than 15 percent of the population had access to a mobile phone, little more than 1 percent could avail a fixed land line, and only 0.2 percent had broadband internet access. Two years later, while over 70 percent of the population had a mobile phone, the country still lagged behind in terms of fixed line and internet services, particularly in rural areas.
Part of the guarantee, which amounts to $8.8 million, is being financed through MIGA’s multi-donor trust fund Conflict-Affected and Fragile Economies Facility.
MIGA’s active gross exposure to Myanmar stood at $511.9 million at the end of last year. All of its investments are concentrated in the telecoms sector.