Mainboard-listed Yoma Strategic Holdings said on Tuesday that the Asian Development Bank (ADB) has approved a loan of up to US$100 million (S$131.18 million) to improve infrastructure connectivity needed for sustainable economic growth in Myanmar.
"Investment in connectivity infrastructure is a key factor in creating better access to economic opportunities, reducing costs, promoting trade, and attracting private investment into diverse geographic areas and sectors," Christopher Thieme, a director in ADB's private sector operations department, said in a press release.
"ADB is delighted to be supporting this important work with Yoma Strategic that will help acceleration of Myanmar's growth."
Myanmar is one of the least-connected countries in the world in terms of telecommunication, transportation, and logistics. In 2012, fixed and mobile telecommunication line penetration rates stood at less than 1 per cent and 7 per cent of the population, respectively.
The road density in Myanmar is also less than one fifth the average in ASEAN countries. The country's inland waterways network, which is important for freight traffic, is also underutilized due to an ageing fleet of vessels and neglected ports facilities.
Myanmar has been experiencing an influx of investors in recent years. Investments, however, have been concentrated in the oil, gas, and other mineral sectors, as well as light manufacturing. Private sector financing for much-needed infrastructure projects to boost connectivity remains a challenge due to an underdeveloped banking sector and capital market, and a lack of alternative funding sources.
The ADB loan will meet the gap for long-term commercial debt for infrastructure designed to enhance connectivity, said Yoma, which has property, agriculture, tourism, automotive, and retail/F&B businesses in Myanmar.
It will be disbursed in two tranches, with Yoma engaging partner companies to work with it on individual infrastructure subprojects.
The first tranche will be used to build telecommunication towers, develop cold storage logistics, and modernize vehicle fleet leasing; the second will fund subprojects in transportation, distribution, logistics and other sectors.