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Japan approves US$ 5 billion development loan for Myanmar’s growth

Published on Thursday, 26 September 2013 19:13

Japan has provided Myanmar with an annual, low-interest development loan of US $5 billion (nearly Ks 5 trillion) as part of a 40-year development plan to assist the country’s growth, sources say.

The loan, at a rate of 0.01 per cent per annum, is set at a lower interest rate than for a recently-approved Chinese loan.

Japan agreed to provide the new Official Development Assistance (ODA) loan after President Thein Sein met with Japanese MP Eriko Yamatain, according to the President’s Office website.
In August, the Exim Bank of China approved a $100 million loan, which led to a parliamentary debate surrounding the 4.5 per cent interest rate per annum.

Among the countries that have approved loans to Myanmar, Japan is the biggest provider. Japan agreed to more than $940 million in assistance last month including the ODA loan, according to the Japanese Embassy.

The agreement with the Chinese bank was signed on April 5 of this year, leading to disputes in parliament. The loan has to be settled within ten years, including the two-year suspension period, and the borrower has to pay 1 percent to the bank in advance management fees.

The Japanese delegation arrived in Myanmar to oversee the loan agreement and report to Japan’s Upper House, which is providing the loans to Myanmar.