ADB to Loan Burmese Conglomerate Yoma $100Mn for Connectivity Projects
By Kyaw Hsu Mon 16 December 2014
RANGOON — The Asian Development Bank will provide a loan of up to US$100 million to local conglomerate Yoma Strategic Holdings to improve infrastructure connectivity in Burma, according to Christopher Thieme, director of ADB’s private sector operations department.
As the regional lender’s first engagement with a local business group, the loan will be dispersed in two tranches, with the first used to build telecommunication towers, develop cold storage logistics and modernize vehicle fleet leasing. The second tranche will fund subprojects in transportation, distribution, logistics and other sectors.
“Investment in connectivity infrastructure is a key factor in creating better access to economic opportunities, reducing costs, promoting trade, and attracting private investment into diverse geographic areas and sectors,” said Thieme, at a loan signing ceremony in Rangoon on Tuesday.
“It is a privilege to be chosen by ADB as a partner to work on improving Myanmar’s infrastructure,” Serge Pun, executive chairman of Yoma, said at the ceremony.
“ADB’s loan will help support our goal of improving the country’s connectivity, which in turn will strengthen local markets, boost productivity, and create jobs,” he added.
The terms of the loan were not disclosed. Pun said the loan would be used to help fund ongoing projects.
“For example, building towers: We have agreed to build 1,280 towers around the country. About 800 towers are already built, so these loans will be used for ongoing projects,” Pun said.
An ADB statement said the projects would support sustainable economic growth in Burma, a global laggard in terms of connectivity metrics such as mobile penetration and road density,
The loan would help offset the fact that “private sector financing for much-needed infrastructure projects to boost connectivity remains a challenge due to an underdeveloped banking sector and capital market, and a lack of alternative funding sources,” the ADB said.
Yoma has property, agriculture, tourism, automotive, and retail businesses in Burma. Its market capitalization was $692 million, as of Dec. 2, 2014.
The ADB loan is not the first time the company has benefited from the support of an international lender: In May, the World Bank’s International Finance Corporation (IFC) gave a $30 million loan to a Yoma small and medium enterprises (SME) lending program.