One week after China signed a batch of new trade deals with Myanmar, Japan announced that it will provide Myanmar USD 1.1 billion in loans to fund four major infrastructure projects.

The agreement, signed by Japanese ambassador to Myanmar Ichiro Maruyama, will finance urban transportation, power distribution, the Yangon sewer system and infrastructure projects in several states. The transportation projects, which include improvements to the Yangon Circular Train, are designed to ease Yangon’s notorious congestion. Officials also claimed that the sewer system improvements could boost wastewater treatment capacity seven fold before 2030. The funding will also go towards roads, bridges and other vital infrastructure in Chin, Rakhine, Mon, Kayin and Tanintharyi. Finally, the loan will continue Japan’s longstanding assistance in updating Yangon’s obsolete power distribution infrastructure.

The announcement comes on the heels of a high-profile visit from Xi Jinping that punctuated a fast-growing economic partnership between Myanmar and China. But while China has a huge presence in Myanmar’s north, Japan has spent years financing projects in and around Myanmar’s economic capital. In Yangon, Japan has funded urban electrification, improved roadways and new flyovers, an overhaul of the public transportation system and the Thilawa Special Economic Zone, which will cost more than USD 3 billion and position a new deep sea port just south of the city.