Japan gives Myanmar US$504m loan, cancels debt

Source: Agencies  |   2013-5-27         
  
JAPAN'S government yesterday extended its first loan to Myanmar in 26 years and canceled the remainder of the Southeast Asian country's debt, as Tokyo looks to re-establish strong economic ties with the nation.

The 51 billion yen (US$504 million) loan agreement was signed in Myanmar's capital Naypyitaw, after Japanese Prime Minister Shinzo Abe met with Myanmar President Thein Sein.

Abe arrived in Myanmar last Friday on the first visit to the country by a Japanese leader in 36 years, a major part of Tokyo's effort to reassert its position as a top economic partner after decades of frosty relations with the previous military government.

Japan also canceled the remaining 176.1 billion yen owed by Myanmar, after forgiving 326.3 billion yen in debt in January.

The loan is Japan's first to Myanmar since 1987.

"The government of Japan considers it important to continue to back up the progress of Myanmar's reforms and will continue its support to Myanmar," the foreign ministry said in a statement.

According to the notes exchanged yesterday, 17 billion yen is to be used for infrastructure improvement in Myanmar, 14 billion yen for electricity generation, and 20 billion yen for power generation and transmission and distribution of energy at a special economic zone.

The development of the 2,400-hectare Thilawa Special Economic Zone, located near Yangon, is Japan's biggest investment project in Myanmar, led by Mitsubishi Corp, Marubeni Corp and Sumitomo Corp.

Japan, Myanmar's largest aid donor, helped clear part of its unpaid debt in an effort to boost Myanmar's reforms and open ways to resume fresh loans for infrastructure building.


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