YANGON — South Korea is to lend Myanmar US$183 million for a bridge linking downtown Yangon and Dala and 100 new railway coaches, the Korea Times reported on November 19.
The loan was extended by the state-run Import-Export Bank of Korea, known as Eximbank, the Seoul newspaper stated.
The 40-year low-interest loan is being provided through Eximbank’s Economic Development Cooperation Fund, a bank spokeswoman said.
The Myanmar government placed orders with South Korean companies to build the bridge and provide the new carriages in return for the loan, she added.
The bridge over the Yangon River is expected to take five years to build.
An Eximbank statement said the South Korean company to be chosen through a bidding process to supply the rail carriages would be required to assemble some in Myanmar under a manufacturing technology transfer arrangement.
The loan agreements were signed by Eximbank chairman and president Lee Duk-hoon, the Deputy Minister of Construction, U Win Myint, and the Deputy Minister of Rail Transportation, U Myint Thein, in Nay Pyi Taw on November 16.
Mr Lee also met President U Thein Sein the same day for talks on promoting bilateral cooperation in the private sector, the Eximbank statement said.
The $183 million loan is the second EDCF-based deal of its kind with Myanmar. In 1996, Eximbank extended a $20 million EDCF loan for a project to buy railway carriages. The Myanmar government is still repaying the 30-year loan, said Eximbank.
“The low-rate EDCF loans given to developing countries are not designed for investment gains. They are just to help emerging countries stand on their own feet in terms of industrial development,” the bank spokeswoman said.
To the end of October, Eximbank had extended a total of $423 million in EDCF loans to 10 state projects in Myanmar, the statement said. The bank has also provided $496 million in export financing to South Korean companies operating in Myanmar, it said.
“Eximbank will hold a joint investment road show with Myanmar and its companies, make efforts to boost business ties between the Myanmar government and Korean firms, and diversify export financing to support those ties,” Mr Lee said.