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Yoma wins ADB loan for infrastructure projects


Singapore-listed Yoma Strategic Holdings Ltd is geared up to play a bigger role in Myanmar's "connectivity" projects thanks to a US$100 million loan from the Asian Development Bank.

Yoma has property, agriculture, tourism, automotive, and retail/F&B businesses in Myanmar. Three business units are engaged in connectivity projects: Myanmar Tower Co (MTC), which operates telecommunication tower construction; Kospa Ltd, a cold storage and logistics business; and Yoma Fleet Co Ltd, which leases trucks to companies.

"All these projects are quite successful," said Serge Pun, Yoma Strategic’s executive chairman, at a press conference yesterday. 

According to Andrew Rickards, the firm’s chief executive officer, ADB focuses on inclusive economic growth that is environmentally sustainable. The loan will be disbursed in two equal tranches. The first will go to the construction and leasing of telecom towers, the development of cold storage logistics, and modernisation of vehicle fleet leasing. The second will fund subprojects in transportation, distribution, logistics and other sectors, including education.

MTC, which is currently the main tower provider for Qatar’s Ooredoo, has signed a contract to build 1,250 telecommunication towers. Among them, more than 800 towers have been completed and transferred back to its clients. All the remaining towers will be completed by March. 

"Telcos have already committed to increase the mobile coverage to 98 per cent in five years. This does not mean population coverage but geographic coverage. In order to meet the target, we will need to build a wide range of towers. And many business people have started using our cold storage services and Yoma fleet in their business operations," said Pun.

"We have planned to implement more connectivity projects soon. We will provide details of these projects later," he added.

"A lot of firms coming to this country [to invest] do not want to buy big-capital equipment. So we would like to provide services to those companies by leasing trucks," Rickards said.

The executive said that ADB is likely to provide an impetus for further commercial lending to similar projects by Yoma. 

Pun acknowledged that ADB rarely lends money to private companies. He attributed the loan’s approval to the firm’s excellent corporate governance record.

"ADB mainly focuses on the standards of corporate governance that our firm has been practicing when it provides loans to a private company. Here, we are very proud to stand as 36th among the [approximately] 500 companies listed in the Singapore Stock Exchange," he said.

He added that it was a privilege to be chosen by ADB as a partner to work on improving Myanmar’s infrastructure. ADB’s loan would help support the firm’s goal of improving the country’s connectivity, which in turn would strengthen local markets, boost productivity and create jobs.

At the press conference, Christopher Thieme, director of ADB’s Private Sector Operations Department, said that the bank is more than happy to support Yoma Strategic’s ongoing infrastructure projects.

"Investment in connectivity infrastructure is a key factor in creating better access to economic opportunities, reducing costs, promoting trade, and attracting private investment into diverse geographic areas and sectors," he said.

Thieme did not provide the details about the interest rate and payback period, but he did say it is a medium-term loan.

To Thieme, corporate governance, transparency, good practices, and social and environmental considerations of a private company play a crucial role in whether it gets a loan from the Asian Development Bank. ADB usually provides a loan only if a firm meets all of these selection criteria.

"I believe the announcement today is not merely about a $100 million loan. We are announcing the beginning of the series of financing facilities by ADB," said Rickards.

 

 

Published : December 16, 2014

By : Khine Kyaw Myanmar Eleven