Yangon, Myanmar, December 12, 2014
—IFC, a member of the World Bank Group, is significantly scaling up its engagement in Myanmar in support of easier access to finance and better infrastructure that will enable the growth of small and medium enterprises, create jobs, and benefit the Myanmar people.
IFC’s total investment portfolio is expected to reach around $400 million for fiscal year 2015 (which ends June 30 2015), up from $92 million as of November 2014. Investments are expected to further rise to $1 billion over the next three years to support development of Myanmar’s private sector, the backbone of the country’s economic growth and job creation. IFC’s current 16
investment and advisory projects focus on improving the business climate and helping enterprises to save funds, insure their firms, and obtain loans to grow their businesses. They are also in support of critical infrastructure development.
“Building business-enabling infrastructure and expanding access to finance are critical to reviving Myanmar’s private sector which will generate much-needed jobs and economic opportunities,” said Vivek Pathak, IFC’s Director for Asia Pacific. “We will continue to work with the government and the banking sector to enhance Myanmar’s infrastructure and financial markets to boost sustainable growth that benefits more people.”
To modernize the power sector in Myanmar, where only around 30 percent of households have access to electricity, IFC is advising the government on the transformation of the state-operated Yangon Electricity Supply Board into a commercially viable corporation to extend reliable and affordable power to millions of people. IFC will consider financing YESB, if necessary, to further support the corporatization process.
IFC is also advising the government on a competitive selection process for an independent power producer to build the 250-megawatt combined-cycle Myingyan power plant to encourage public-private partnerships and attract more power developers to Myanmar.
In the future, IFC is set to scale up its support for infrastructure even more, with a focus on key sectors such as power, telecommunications and transport.
As lack of access to finance is one of the main barriers to growth for businesses,
IFC has focused on helping local banks reach out to more customers, especially small and medium enterprises. We are advising Myanmar Oriental Bank and Yoma Bank, and microfinance institutions to improve corporate governance, risk management and trade finance while also providing capital to boost scale and expand services to those without banking connections.
At the regulatory level, a focus during the current fiscal year is to support Myanmar’s central bank in developing at least one credit bureau by June 2016, allowing lenders to access borrowers’ credit history, better evaluate loan risks, and thereby extending loans more quickly and on a larger scale than currently where too little information makes banks reluctant to lend.
To facilitate discussions for business reforms, IFC is working with the government and the Union of Myanmar’s Federation of Chambers of Commerce and Industry to establish the Myanmar Business Forum, a public-private dialogue platform to facilitate reforms that help companies grow and create jobs. IFC also supports the preparation of a new investment law and regulations that aim to create a level-playing field for local and foreign investors.
“What we are seeing currently is that many investors are eying the Myanmar market, but too many remain on the sidelines amid unclear rules and regulations,” said Vikram Kumar, IFC Resident Representative for Myanmar. “Improving the ease of doing business will help attract more domestic and foreign investment which Myanmar very much needs to develop.”
IFC is also exploring ways to support Myanmar’s agriculture and tourism sectors – the two largest generators of jobs globally. In fiscal year 2014, IFC committed $80 million to subsidiaries of Shangri-La Asia Limited to expand its hospitality business in Myanmar to address the shortage of hotel rooms as international arrivals in the country have been increasing by 30 percent annually since the economy opened. The project is expected to create about 1,000 direct jobs in addition to indirect ones.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit
www.ifc.org
.
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