Japan and Myanmar have finalized a set of loans totaling around USD 409 million to develop Myanmar’s small and medium enterprises and to build a new bridge across the Sittaung River.

Japanese ambassador to Myanmar, HE Ichiro Maruyama and deputy minister for planning, finance and industry U Maung Maung Win inked the deal last week. It will provide Myanmar around USD 265 million for the bridge, and an additional USD 144 million to go towards financing for small and medium enterprises. “This project will provide funds for SMEs by Medium and Long-term loans with flexible terms on collateral as well as support for financial institutions’ capacity development,” the Japanese embassy said in a statement.

The new bridge will lie along a new highway linking Bago with Kyaiktiyo, Mon State, on the way to the Thai border. Last week, the Asian Development Bank extended its own loan of more than USD 480 million to help build the highway. The road and bridge will be key parts of the East-West Economic Corridor initiative, with which Myanmar aims to boost its trade capacity with its ASEAN neighbors, especially Thailand. Indeed, although the COVID-19 pandemic has dampened trade, during the previous fiscal year Myanmar proportionally increased trade with ASEAN nations.

“Since the volume of trade with Thailand, the largest trading partner with Myanmar, is expected to continue to increase, it is essential to develop the East-West Economic Corridor to enhance the logistics sector’s efficiency,” the embassy statement said.