YANGON—During Chinese President Xi Jinping’s visit to Myanmar last week, the two countries signed 33 agreements aimed at accelerating China’s ambitious Belt and Road Initiative (BRI) infrastructure projects. It was a busy week for business in Myanmar, especially as a Japanese tech firm and Hong Kong-based AIA insurance launched their first operations in Myanmar. Myanmar animation company Joosk Studio received a six-figure investment from a Vietnam-based venture capital group.
The Myanmar Investment Commission (MIC) announced that foreign investments have doubled in the first three months of the fiscal year, compared with the same period last fiscal year. The MIC also approved a US$140.47-million (206.79-billion-kyat) power plant project in Rakhine proposed by the Hong Kong-based company. The Myanmar government, three Chinese companies and a Myanmar company also inked an agreement to speed up $2.5 billion worth of power projects in Myanmar. This week, The Irrawaddy examines some significant business activity and events across Myanmar.
Myanmar sees FDI double
Since the current fiscal year began on Oct. 1, the MIC has approved double the amount of foreign direct investment that it approved in the first three months of the last fiscal year.
The government investment agency, the Directorate of Investments and Company Administration (DICA), said that as of January, approved FDI has reached over $1.5 billion since the start of the 2019-20 fiscal year, compared with $800 million in the same period of the 2018-19 fiscal year.
The country has reportedly received $500 million per month since the start of the fiscal year. DICA added that although the commission has approved a significant number of high-value foreign investment projects, it is also working to ensure the projects are sustainable and beneficial.
An MIC representative said the commission rejected proposed projects that were judged to have the potential to damage the country’s social and environmental landscape as stipulated under the Myanmar Investment Law. Most recently, at its meeting on Jan. 10, the commission rejected two proposed investment projects that might bring damage to the environment.
According to DICA, FDI in the 2018-2019 fiscal year increased to $4.2 billion, up from $3.3 billion in the previous year. The MIC has forecasted that Myanmar will receive $5.8 billion in the current fiscal year.
As of December, Singapore is the country’s largest foreign investor, contributing nearly 27 percent of Myanmar’s total FDI. Singapore is followed by China, Thailand and Hong Kong.
AIA launches operations in Myanmar
Asia’s largest public insurance group, Hong Kong-based AIA, formally launched its operations in Myanmar on Sunday. AIA received its business license in November from the Ministry of Planning and Finance and is licensed to sell life insurance policies in the country through a wholly owned subsidiary, AIA Myanmar.
As a part of its launch ceremony on Sunday in Yangon, AIA also organized AIA KICK, a youth football training program in Yangon that brought coaches from the company’s partner English Premier League football club, Tottenham Hotspur, to help teach Myanmar children about football.
AIA has been invested in Myanmar since 2013. When AIA and four other insurance companies received licenses in November, it was the first time the government had licensed fully foreign-owned insurance companies.
The Ministry of Planning and Finance (MOPF) announced in January 2019 that it would grant permission to foreign companies wishing to operate businesses offering life and non-life insurance in Myanmar.
The liberalization of the insurance sector is recognized as a flagship reform under the NLD government. In the past, only companies offering non-life insurance could operate, and only if their representative offices in Myanmar partnered with local insurance companies. No fully foreign-owned insurers were granted permission to operate in Myanmar.
Myanmar animation firm receives foreign investment
Myanmar animation studio Joosk Studio has received a six-figure investment—in dollars—from Vietnam-based venture capital firm Nest Tech VN, according to a press statement released Monday. Myanmar’s Emerging Markets Entrepreneurs (EME), which was already invested in Joosk, also added to the investment.
The exact size of the investment was not disclosed.
Founded in 2015, Joosk is a creative digital animation agency known by some for its popular Facebook comic series Sassy Bound, which won Amara Digital Marketing’s Myanmar Influencer of the Year 2018 award in art and design. “Sassy Bound the Movie” will be in theaters nationwide by 2021. Joosk also works with clients such as Facebook, CB Bank and Telenor as well as NGOs, UN agencies and the World Bank Group.
Myanmar, China ink agreement to speed up $2.5-billion power project
The Ministry of Electricity and Energy (MOEE) signed a letter of intent on Jan. 17 to speed up a liquefied natural gas (LNG) power project under development by three Chinese companies and a Myanmar company.
The project, located in the Mee Laung Gyaing area of Shwethaungyan Township in Pathein District, Ayeyarwady Region, will cost $2.5 billion and will be the largest LNG project in the country.
It is projected to generate 1,390MW of electricity and slated for completion in 2023. The project is being developed by China’s Yunnan Provincial Energy Investment Group Co Ltd, Union Resources and Engineering Co Ltd, and Zhefu Holding Group Co Ltd with Myanmar’s state-owned Supreme Trading Co Ltd.
According to the Ministry of Information, the project will include 3 LNG power plants, an LNG port, an 80-mile-long 230KV transmission line and a 130-mile-long 500KV transmission line. The project is expected to meet the electricity demand of Ayeyarwady Region and transfer power to other states and regions.
The letter of intent for the power project is one of the 33 agreements reached during Chinese President Xi Jinping’s visit to Myanmar.
Hong Kong company to invest in Rakhine power sector
The MIC announced it recently approved a $140.47-million power plant project proposed by Hong Kong-based CNTIC VPower KY3 Limited Company.
According to DICA, VPower will develop and fully own a 150MW LNG power plant in Kyaukphyu, with 20 percent of the power distributed in Rakhine State and the remaining 80 percent going to the national grid.
According to the Ministry of Information, VPower also invested $65 million in running a 90MW gas power plant in Taungtha Township in Mandalay Region. Along with a joint-venture company, the company also built a 145.49-MW gas power plant in Mandalay’s Kyaukse Township and invested $363 million in a 400MW LNG plant in Thaketa Township in Yangon.
Japan’s NNT opens office in Yangon
Japan technology services firm NTT Ltd launched its first office in Yangon on Wednesday. The company aims to provide information technology services, IT solutions and IT-related services to businesses in Myanmar.
According to the company, it has invested $5 million in Myanmar. The company is also implementing the $400-million MIST undersea cable project, connecting Singapore, Myanmar and India, specifically Mumbai and Chennai.
According to the company, Myanmar’s telecommunications sector is growing at 6-12 percent annually, which is higher than the GDP growth rate in most developing Asian countries. With the completion of the cable, data management software technologies for Myanmar digital businesses will be able to develop rapidly.
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