Press Release

On 4th November 2020 , the Japan International Cooperation Agency (JICA) signed Loan Agreements (L/A) with the Government of the Republic of the Union of Myanmar (GOM) to provide Japanese ODA loans of a total of 42.779 billion Japanese Yen for the following two projects;

1) East-West Economic Corridor Highway Development Project (New Bago-Kyaikto Highway Section)

JICA is providing 27,779 million Japanese Yen (approx. $260 million) concessional loan to GOM to implement the East-West Economic Corridor Highway Development Project (New Bago-Kyaikto Highway Section) in the form of co-financing with Greater Mekong Subregion East-West Economic Corridor Highway Development Project extended by Asian Development Bank (ADB). The project involves construction of a new bridge crossing over the Sittaung river and upgrading of related facilities which contribute for improving maintenance of bridges on the East-West Economic Corridor. This improves the important corridor to realize full use of Myanmar's geological advantage and bring economic development to the country as a whole, and in Mon State, Bago Region, and Kayin State where enhanced economic activities are expected along the corridor, which will contribute to a good cycle of peace and economic prosperity.

2) Project for the Development of Finance for Small and Medium-sized Enterprises (Phase 3)

The Project for the Development of Finance for Small and Medium-sized Enterprises (Phase 3) or more widely known as "JICA SME Two-Step Loan (Phase 3)", is the third financial support under the COVID 19 response support package, following the 5 billion JPY (approx. $47 million) emergency support to SMEs and 30 billion JPY (approx. $280 million) concessional budget

support. With this newly signed project amounting to 15 billion JPY (approx. $140 million), the total financing amount of the package is accumulating to 50 billion JPY (approx. $470 million).

The loan proceeds are going to be utilized to extend "low-cost" and "medium to long-term maturity" financing to SMEs in nationwide through the Participating Financial Institutions (PFIs), with the baseline interest rate of 5.5% (=minimum deposit rate + 0.5%=5.5% as of May 2020) and maturity of 1 to 5 years. Also, as a special treatment to support smooth recovery from COVID19 economic impact, ceiling on Working Capital investment is lifted as a temporary measure during the initial project period to provide financial support to SMEs struggling with cashflow constraints.

Capacity development supports to PFIs, such as trainings of credit appraisal skills for loans under collateral eased condition, are also provided under the project, which eventually plays a crucial role for long-term sustainable development of the SME financing in Myanmar.

"The two projects signed under such severe circumstances demonstrate JICA's strong commitment to resilient recovery and sustainable economic growth of Myanmar through both infrastructure and financial sector development.", said Mr. Sakakura Noriji, Chilef Representative of JICA Myanmar Office. "JICA hopes these projects lay a foundation for prosperous society in the post-COVID19 world."

Terms and Conditions

Project	Amount (million yen)	Annual interest rate (%)	Repayment period (years)	Grace period (years)	Procurement
East-West Economic Corridor Highway Development Project (New Bago-Kyaikto Highway Section)	27,779	0.01	40	10	General untied
Project for the Development of Finance for Small and Medium-sized Enterprises (Phase 3)	15,000	0.01	40	10	General untied

Ex-Ante Evaluation

• East-West Economic Corridor Highway Development Project (New Bago-Kyaikto Highway Section)
• Project for the Development of Finance for Small and Medium-sized Enterprises (Phase 3)