October 16, 2015
On October 16, the Japan International Cooperation Agency (JICA) signed loan agreements with the Government of the Republic of the Union of Myanmar in the capital of Nay Pyi Taw to provide Japanese ODA loans of up to a total of 99.85 billion yen for three projects.
Inaugurated in March 2011 and starting its fifth year in March, the Thein Sein administration has maintained a practice of implementing measures in such areas as democratization, strengthening the rule of law, national reconciliation and economic reform. Given these efforts by the Government of Myanmar, Japan resumed ODA loans to the country in 2013 after a 25-year hiatus, and since then has provided ODA loans for 12 projects, backing reform in Myanmar and supporting sustained development.
Due to the effects of economic sanctions being lifted and the promotion of investment and trade in recent years, Myanmar has undergone a transition in its real economic growth to a rate exceeding seven percent. However, because the country now faces urban transportation issues, including traffic congestion due to rapid urbanization particularly in the former capital of Yangon, and the transmission capacity of the basic power lines is expected to be exceeded, updating the deteriorating social infrastructure is a priority. In addition, the economic growth has stimulated the transportation of goods between neighboring countries, but the international trunk roadway infrastructure in Myanmar cannot keep pace, hindering transportation on the overland transportation network.
Taking into account these circumstances, these Japanese ODA loan agreements were signed for the three projects described below.
(1) Improving a circular railway line to support the traffic volume in Yangon
The Yangon Circular Railway Line Upgrading Project will provide replacements and repairs to the deteriorating rolling stock and railway signal system to improve services on the Yangon Circular Railway Line and to anticipate a rising ridership. The project will also improve the capacity to transport passengers along with the safety and comfort of public transportation services, and stimulate socioeconomic activities in the Greater Yangon area. These improvements are expected to reduce the time to travel one circuit from the current 170 minutes to 110 minutes, as well as reducing the train intervals from the current rate of one train every 15 to 40 minutes to one every 10 to 12 minutes.
To ensure that the project produces long-term benefits, a variety of cooperation approaches are being adopted, including the effective incorporation of technical cooperation. Specifically, a transfer of technology will be provided in the Project on Improvement of Service and Safety of Railway to enhance the maintenance, operation and management technology of railway engineers at Myanma Railways, which is the executing agency for the project. In addition, an expert was dispatched in March, 2015 to support urban transportation management.
For the railway sector in Myanmar, projects currently underway include the Project for Installation of Operation Control Center System, grant aid for Enhancing Railway Operation Safety, and the Yangon-Mandalay Railway Improvement Project Phase 1 (1), an ODA Loan project with the objective of making improvements to the trunk railway between Yangon and Mandalay.
Through the use of railway technology developed by Japan, JICA’s policy is to contribute widely in Myanmar’s railway sector including in the areas of facilities modernization, standards and safety improvement, capacity development in operation and maintenance, and passenger service improvements. JICA aims to provide comprehensive cooperation that has an impact and contributes to socioeconomic development in Myanmar.
(2) Contributing to the stable supply of power in Myanmar
In the National Power Transmission Network Development Project (II), substations and power transmission lines will be built to connect the Bago Region in the south to the Yangon Region. This will make it possible to boost the power in the substations connecting the north and east regions supported in phase I of the project to 500 kilovolts for transmission to Yangon which has the largest demand for power, contributing to the economic development of Myanmar with a stable power supply.
(3) Improving transportation with an improved international trunk roadway
In the East-West Economic Corridor Improvement Project, three bridges (the Gyaing Kawkareik, Atran and Gyaing Zathabyin Bridges) that hinder the smooth flow of goods due to vehicle weight restrictions will be replaced on the East-West Economic Corridor that is an international trunk road connecting Vietnam, Thailand and Myanmar, stimulating a smooth flow of transportation and trade not only in Myanmar but in the Mekong region as well. Through this project and other improvements to nearby intervals supported by other donors, the travel time between Bangkok and Yangon is expected to drop from the current 3.5 days to 1.9.
This project will incorporate the outcome of technical cooperation that has been provided in the past. The Bridge Engineering Training Center Projects in particular established a bridge engineering training center in the 1980s where training in design engineering along with construction practice through the construction of actual bridges has taken place. Training has continued at the center since the project ended, contributing to the development of bridge technology in Myanmar. Human resources who have received training at the center will be involved in the project, and it is expected that technology developed through technical cooperation will be used.
Terms and Amounts of Loans
|Annual interest rate (%)||Repayment
|(1) Yangon Circular Railway Line Upgrading Project||24,866||0.01||0.01||40||10||General untied|
|(2) National Power Transmission Network Development Project Phase II||41,115||0.01||0.01||40||10||General untied|
|(3) East-West Economic Corridor Improvement Project||33,869||0.01||0.01||40||10||General untied|