This summary covers debt financing by Bank of China (Hong Kong) Limited (“BOC(HK)”) to Myanmar Fiber Optic Communication Network Co., Ltd. (“MFOCN”) for the Third HyalRoute Fiber Optic Cable Network Project in Myanmar. BOC(HK) has applied for a MIGA guarantee to cover its non-shareholder loans and interest totaling US$125 million for a guarantee period of five years against the risks of Transfer Restriction, Expropriation, and War and Civil Disturbance.
This third fiber optic cable (FOC) project involves the construction of an additional 4,500km FOC network in Myanmar by MFOCN. In January 2017 and June 2018, MIGA supported the first and second projects, which constructed 4,500km and 4,000km of FOC respectively. The total investment for this project is estimated at US$113 million, including US$13 million in equity from Hyalroute Communication Group Ltd. and US$100 million in debt financing from the BOC(HK). The project is expected to start construction in July 2019.
The project is a category B under MIGA’s Click here to view the Environmental and Social Review Summary..
The project’s major expected development impact is the improvement of the telecommunications infrastructure sector and promotion of economic growth in Myanmar. The construction of the fiber optic cable as part of the national network is expected to: (i) increase access to telecom services in urban and rural areas; (ii) provide additional tax revenues for the government; and (iii) boost economic activity and employment opportunities, directly and indirectly, during the construction and operational phases. The project is aligned with the Government of Myanmar’s Telecom Master Plan (2016-2020), which promotes fiber optic cable network development and foreign direct investment in the telecom sector. Similarly, MIGA’s proposed support for the project is aligned with the agency’s priorities of supporting investments into countries eligible for financing from the International Development Association (IDA) and countries affected by conflict (FCS).