China Eximbank provides RMB 300 million government concessional loan for Myanmar Section of Greater Mekong Subregion (GMS) Information Superhighway Network (ISN) Project (Linked to Record ID#96221, 98029)

Project narrative

In July 2005, China, Myanmar, Vietnam, Thailand, Laos, and Cambodia signed a Memorandum of Understanding (MOU) on the Planning and Construction of a Greater Mekong Subregion (GMS) Information Superhighway Network (ISN). Then, on February 14, 2006, Myanmar’s Minister for Communications, Posts and Telegraphs Brig-Gen Thein Zaw and China’s Minister for Information Industry Wang Xudong signed an MOU on the Construction of Greater Mekong Information Superhighway Myanmar Section. In March 2007, China Eximbank and the Government of Myanmar signed an RMB 300 million government concessional loan (GCL) agreement for the Myanmar Section of the Greater Mekong Subregion (GMS) Information Superhighway Network (ISN) Project. The borrowing terms of the GCL are unknown. However, it is known that the proceeds of the GCL were to be used to finance a commercial (EPC) contract between Myanmar Post and Telecommunications Corporation and Alcatel-Shanghai Bell Co Ltd., which was signed on June 11, 2007. The purpose of the project's Myanmar section was to lay more than 2000 km of fiber optic cable from Muse to Tachilek via Mandalay and Yangon. Phase 1 of the project was complete as of March 2008. Also, in March 2008, a Myanmar–China fiber optic link was built from Kunming to Muse (on the China border) with its link further extended to reach Yangon. However, it is unclear whether/when Phase 2 commenced, and how it was financed. There are some indications that the China Eximbank loan for the Myanmar Section of the Greater Mekong Subregion (GMS) Information Superhighway Network (ISN) Project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, China Eximbank and the Government of Myanmar signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI). Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under 3 buyer’s credit loan (BCL) agreements, 6 government concessional loan (GCL) agreements, and 27 preferential buyer’s credit (PBC) agreements (as captured via Record ID#98029). Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#96221).