MIGA Backs Roll Out of Fiber Optic Cable in Newly Emerging Myanmar
WASHINGTON DC, January 25, 2017 – MIGA, a member of the World Bank Group, announced today a guarantee of $105.74m for Bank of China (Hong Kong) Limited's loan to Myanmar Fiber Optic Communication Network Co Ltd, Myanmar's largest fiber optic cable ("FOC") infrastructure provider, for rolling out 4,500km of FOC. When completed later this year, the Project will have connected 66 cities and towns in 10 states and 6 metropolitan areas across the central and southern parts of the country.
The Project is the first part of the second phase of a broader plan to lay down 32,000km of cable across the country during the 2012-2023 period. Over half of the plan has already been completed.
The guarantee provides coverage for up to five years against the risks of currency inconvertibility and transfer restriction, expropriation, and war and civil disturbance.
"By building out the fiber optic cable backbone network across the country, the Project is expected to support increased access to telecom services in both rural and urban areas," said MIGA Executive Vice President and CEO Keiko Honda. "We're pleased to play a part in unleashing Myanmar's potential as it moves to its exciting next chapter."
Affected by fragility, conflict, and violence, Myanmar had been among the least connected countries in the world for many years. In 2013, less than 15 percent of the population had access to a mobile phone, a little over 1 percent of the population could avail of a fixed land line, and only 0.2 percent had broadband internet access. And although just two years later, over 70 percent of the population had a cell phone, Myanmar still lags far behind when it comes to fixed line and internet services, particularly in rural areas.
$8.8m of the guarantee for this Project is being financed through the Conflict Affected and Fragile Economies Facility ("CAFEF"), a multi-donor trust fund that permits MIGA to prudently expand its exposure in conflicted-affected economies, while also mobilizing reinsurers.
The total cost of the project is estimated at $118.6m, with $18.6m financed through equity investment by communications network infrastructure company HyalRoute, and $100m through debt financing from Bank of China (Hong Kong) Limited.
Mr Lin Jingzhen, Deputy Chief Executive of Bank of China (Hong Kong) Limited, said, "Adhering to our strategy of 'Serving Society, Delivering Excellence', we are proud to join hands with MIGA to finance for this meaningful Project. By extending telecom services to underserved areas in Myanmar, this will help take the country's development to the next level. Going forward, we will remain committed to the prosperity and sustainable development of the countries in ASEAN and along the Belt & Road."
As of December 31, 2016, MIGA's active gross exposure in Myanmar was $511.9m, all of it in the telecommunications sector.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders. For more information, visit www.miga.org
In Washington: Vamsee Krishna Kanchi, (202) 458-9771, email@example.com
For Broadcast Requests: Huma Imtiaz, (202) 473-2409, firstname.lastname@example.org
For more information, please visit: miga.org
Stay updated via Twitter: twitter.com/MIGA
Follow us on LinkedIn: linkedin.com/company/wb-miga
Watch our videos on YouTube: youtube.com/MIGAWorldBank