The FINANCIAL — IFC, a member of the World Bank Group, is helping to improve Myanmar’s under-developed transportation sector by providing $40 million of financing to Myanmar Industrial Port (MIP). MIP is one of two major container ports in Myanmar and a key trade gateway that handles more than 300,000 twenty-foot equivalent units (TEUs) annually or 40% of the country’s container traffic.
The $40 million in mezzanine financing is the first phase of a $200 million financing package which is expected to include $160 million in long-term senior loans to be provided by IFC and other foreign lenders. The financing package will help the company increase capacity and efficiency at its container terminal in central Yangon, the commercial capital of Myanmar. With IFC’s long-term funding, the company will be able to complete the first phase of its expansion plans which, together with the efficiency improvements, will increase the terminal’s annual handling capacity to 500,000 TEUs or more, according to IFC.
The investment is IFC’s first in the transportation sector in Myanmar and is part of a broader strategy to help Myanmar do business more efficiently and more competitively thereby unlocking the country’s potential for increased international trade and supporting job creation and economic development.
“Thanks to IFC’s investment, we will be able to further modernize our port operations and respond to the increasing demands of international shipping lines and local traders,” said Captain U Ko Ko Htoo, MIP’s Chairman. “We are also keen on IFC’s advice on bringing our environmental, social and governance practices into line with international standards.”
Myanmar’s container volumes are estimated to have increased by 90 percent over the last 3 years due to rapid growth in imports and exports following the government’s implementation of political and economic reforms.
“IFC’s financing for MIP comes at a critical time in Myanmar’s development when transport infrastructure is urgently needed to realize the country’s growth potential,” said Hyun-Chan Cho, IFC’s Head of Infrastructure and Natural Resources for Asia. “The MIP loans will also help to catalyze investment by other private developers and financiers in Myanmar’s infrastructure sector for which long-term US dollar funding has not been readily available.”
IFC, together with the World Bank, is supporting reforms and investments in Myanmar to strengthen the private sector and create jobs in order to reduce poverty and boost shared prosperity. IFC is working with the government and the private sector to improve the country’s investment climate, access to finance, and infrastructure, with an initial focus on the power, telecommunications, and ports sectors.
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