Apr 21, 2011

Asian Development Bank (ADB) and major Chinese banks to support investment projects in Myanmar

China is pouring investment dollars into Myanmar in a bid to build bridges with its neighbour. In the most recent developments, China Communications Construction (CCC) and dam-builder Sinohydro announced major infrastructure investments in Myanmar involving the construction of an airport at the new capital of Naypyidaw at a projected cost of US$100 million, and a hydropower project to be completed by the end of 2012.

The cross-border investments are being undertaken with the encouragement and assistance of the Asian Development Bank (ADB).

CCC, which is listed in Hong Kong and plans to list in Shanghai, said the contract was worth over US$100 million and will be financed by a loan advanced on generous terms by the state-owned China Exim Bank.

"This project will significantly increase the internationalisation of the Myanmar capital of Naypyidaw and increase CCC's influence in Myanmar," the company said.

Also in December, Sinohydro, China's largest dam builder which plans to list in Shanghai, won a 90.8 million yuan (HK$107.04 million) contract to build a hydropower station in Myanmar to be completed by the end of 2012. It will have an installed capacity of 120,000 kilowatts, according to the firm's website.

The Yeywa hydropower station in Myanmar, also built by Sinohydro, went into operation in October. Its installed capacity is 790,000 kilowatts and it can generate 3.55 billion kilowatt-hours of electricity, which will raise Myanmar's total installed electric capacity by 50 per cent.

Myanmar signed an agreement to obtain a US$2.4 billion loan from the China Development Bank, according to media reports. The loan will be used mainly to finance a natural gas pipeline from Myanmar to Yunnan province, which is currently being built by China National Petroleum Corp, the largest Chinese state-owned energy conglomerate.

"The investments required are huge and will have to be implemented over many years, and only few of the possible interconnections have been studied in detail at this time," ADB senior media officer Ramoncito dela Cruz said.

During a visit to China by Myanmar's top leader Than Shwe in September last year, he and Chinese President Hu Jintao pledged to increase economic ties between the two countries.

Source: South China Morning Post