IFC, a member of the World Bank Group, has recently announced that it will help to improve Myanmar’s under-developed transportation sector by providing US$40 million of financing to Myanmar Industrial Port (MIP). 

The US$40 million in mezzanine financing is the first phase of a US$200 million financing package which is expected to include US$160 million in long-term senior loans to be provided by IFC and other foreign lenders.

MIP is one of two major container ports in Myanmar and a key trade gateway that handles more than 300,000 twenty-foot equivalent units (TEUs) annually or 40% of the country’s container traffic. 

The port has been operated since 2013 by Myanma Annawa A Shin Group Co, which is fully owned by the U Ko Ko Htoo family, with the international shipping veteran Captain U Ko Ko Htoo as its main shareholder.

The financing package will help the company increase capacity and efficiency at its container terminal in central Yangon, the commercial capital of Myanmar.  With IFC’s long-term funding, the company will be able to complete the first phase of its expansion plans which, together with the efficiency improvements, will increase the terminal’s annual handling capacity to 500,000 TEUs or more. 

Myanmar’s container volumes are estimated to have increased by 90 percent over the last 3 years due to rapid growth in imports and exports following the government’s implementation of political and economic reforms. 

IFC is working with the Myanmar’s government and the private sector to improve the country’s investment climate, access to finance, and infrastructure, with an initial focus on the power, telecommunications, and ports sectors. 

Captain U Ko Ko Htoo, MIP’s Chairman, said:

“Thanks to IFC’s investment, we will be able to further modernize our port operations and respond to the increasing demands of international shipping lines and local traders. We are also keen on IFC’s advice on bringing our environmental, social and governance practices into line with international standards.” 

Hyun-Chan Cho, IFC’s Head of Infrastructure and Natural Resources for Asia, added:

“IFC’s financing for MIP comes at a critical time in Myanmar’s development when transport infrastructure is urgently needed to realize the country’s growth potential. The MIP loans will also help to catalyze investment by other private developers and financiers in Myanmar’s infrastructure sector for which long-term US dollar funding has not been readily available.”