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 (“FOC”) Network Project in Myanmar. BOC(HK) has applied for a MIGA guarantee to cover its non-shareholder loans and interest totaling US$116.28 million in gross exposure for a guarantee period of five years against the risks of Transfer Restriction, Expropriation, and War and Civil Disturbance.
This third FOC project involves the installation and maintenance of a 4,500 km of FOC network in Myanmar by MFOCN. As part of a broader nationwide FOC program to lay down 62,000 km of fiber optic cables, the Project constitutes the first part of phase III of the program, and aims to lay down 4,300 km direct-buried backbone FOC in 7 states and 200 km of duct-buried routes in urban areas in Myanmar. The total investment for this project is estimated at US$112.4 million, including US$12.4 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 will benefit from the use of IDA PSW MIGA Guarantee Facility.
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).