myanmar tee v1

TEE International LimitedVenture Into Myanmar

Feb 2016

“Asia’s Uncut Gem” – ANZ Research

Idea Generation

2

Myanmar

Infra Deman

d

Infra Supply Politica

lCatalys

t

Executive Summary of Project

3

Proposal to Venture Into Myanmar

Outstanding Macro

OutlookRegulatory

IssuesTremendous potential for

TEE

Outstanding Macro Outlook

Outstanding Macro Outlook

5

GDP Growth & Strategic Location• 8.7% in 2014

• Forecasted 7.3% per year over next 5 years (higher than peers)

Foreign Direct Investment & Govt Spending• Soared to USD 8 billion , USD 3 billion

more than anticipated in 2015• 25x more than 2009/2010, year military

ceded power• Tax Receipts to be having 7.6% of total

GDPYoung Labour Force• Population range from 55m to 70m.

Median age at 27.2

• Companies who will provide training and meaningful job creation will be favored by government

Agriculture losing dominance to

manufacturing sector. Ability to access to

China and India

Major Infrastructure

Gaps for businesses

Global brands and players to move in

Opportunity

Outstanding Macro Outlook: GDP Growth & Strategic Location

6

2010 2011 2012 2013 201402468

10

5.35 5.91 6.7 6.58.7

Annual GDP growth rate %

Annual GDP growth rate

• GDP Growth at 10.21% CAGR for last 6 years.

• Agriculture sector losing its dominance. A de-crease from 42% of GDP contribution to 33%, making way for manufacturing activity.

• Manufacturing sector made up of 21% of total output in 2012

2011 2012 20130

500

1000

1500

2000

2500

946 1025 1095

14461701 1793

1421

1107 1204

17551909

2052

Cambodia Lao PDR Myanmar Vietnam

• GDP per capita of US$ 1204 In 2013

• Ranks below peers such as Vietnam and Laos

• Wages are expected to stay low. No sign of minimum wages policy being imple-mented

• Beneficial for manufacturing

GDP Per Capita in USD

Source: WorldBank


7

2013 2014 2015e 2016f 2017f 2018f4

4.5

5

5.5

6

6.5

7

7.5

8

8.5

9

7.4

7 6.9 6.9 6.8 6.8

8.5

7.5

6.4

7 6.9 6.9

8.5 8.5

6.5

7.8

8.5 8.5

5.4

6

6.5 6.66.3

6

Cambodia Lao, PDR Myanmar Vietnam

Real GDP Growth (%) Forecasted

• Real GDP Growth forecasted is expected to outperform local neighboring countries of the same characteristics

Source: WorldBank

8

• Strategically positioned to benefit from the dual economic ascension of China and India. This allows immediate access to east and west potential market with 3 billion people in upcoming decades.

• Will integrate more fully into ASEAN Economic Community (AEC) from Dec 2015 onwards, access to a potential of 600m people

• Could develop into manufacturing and logistics hub located between to Asian giants

• By 2030, half of the world’s consuming class will be within a four hour flight from Myanmar

India 1.3 billion

China 1.4 billion

ASEAN 0.6 billion


9

Cambodia Laos Myanmar Vietnam

-600

-400

-200

0

200

400

600

800

1000

1200

1400

349

135.425.5

1236.8

223.8

75 84.6

-50.7

523

73.6151.2

-342

298.8

0

1186.81256.8

2010 2011 2012 2013

Intra-Group ASEAN FDI

• Myanmar’s Intra-Group FDI has been growing at a 161.19% CAGR (2010 to 2013), outperforming the rest of the peers at ASEAN

2006 2007 2008 2009 2010 2011 2012 20130

50

100

150

200

250

300

350

400

450

500 Myanmar Manufacturing FDI in mil-lions

Myanmar Manufacturing FDI

• In recent years, global brands such as GE, Samsung, Unilever, Heineken and Coca-cola has announced plans to venture into Myanmar and establish manufacturing hubs due to cheap wages.

Outstanding Macro Outlook: FDI & Govt Spending

Source: WorldBank


10

• Global FDI into Myanmar skyrocketed in 2014-2015

• The $8.1 billion in FDI is a staggering 25 times the $329.6 million received in 2009/2010, the year before the military ceded power.

2010

2011

2012

2013

2014

2015

7351

9919

1.4

7954

6048

9.1

1440

9780

35

1345

0442

52

1730

3559

30

2500

0000

000

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

CambodiaLao PDRMyanmarVietnam

FDI U

SD in

Bill

ions

Global FDI, net inflows BOP (US dollar)

Source: WorldBank

8.1 billion USD

11


New Foreign Investment law. Example: telecom license awarded to foreign companies and new exchange rate float

implemented. (Awarded to Telenor and Ooredoo)

New standardize MMK/USD floating exchange rate in April 2012, Myanmar government will now more accurately measure the income of state-owned enterprises, increase

government spending, anticipating a jump from 66% to more than 70% of government revenue.

In the past, tax receipts only represent 3.3% GDP compared to world average of 22% and ASEAN average of 13.2%. With more structures put in place to enforce tax collection, IMF predicts a steady growth of 7.6% GDP in tax revenue

by 2016.

Government fiscal spending is expected to increase from 15-17% to 28.4% (2012-2014).

Outstanding Macro Outlook: Youthful Workforce

12

2009 2010 2011 2012 2013 201440.00

45.00

50.00

55.00

60.00

65.00

70.00

75.00

55.81

63.60

49.92

42.30

53.85

Age Dependency Ratio

CambodiaLao PDRMyanmarVietnamWorld

× 100

Source from WorldBank

Myanmar below world

average

Outstanding Macro Outlook: Urban Population % Comparison

13

2008 2009 2010 2011 2012 2013 201415

20

25

30

35

40

20.5%

37.6%

33.6%33%

CambodiaLao PDRMyanmarVietnam

Urban % of Population

Source from WorldBank

Rate of urbaniza

tion outpace peers

14

Outstanding Macro Outlook: Youthful Workforce

Urbanization growth rate at 2.9% to outpace annual population growth rate. As of 2014, Myanmar has higher percentage of urban population than Vietnam and Cambodia.

Median age of 27.2. Has a low age dependency ratio as compared to Laos and Cambodia.

Young labour force Is key asset but with very low education expenditure

Currently no minimum wage, garment workers earn about US 35 per month in Yangon Industrial Zone. By comparison, labour cost in Laos and Cambodia is about US 75-80 per month

With low wages, Myanmar will be a competitive country for manufacturing, moving the manufacturing hub from China (with wages costing 103-178 US dollar per month)

Key to help tip balance in company’s favor 1) meaningful job creation for locals, 2) opportunities for skills upgrading of workforce

Regulatory Issues

16

Regulatory Issues: 3 focus

Removal of Sanctions

New Investment Law & Screening of FDISpecial Economic Zone & Structure of Power

17

Regulatory Issues: Removal of Sanctions

Clearing of Debt• Japan, Asian Development Bank (ADB), the World Bank and Paris Club

cleared over 6 billion or 60% debt owed by Myanmar.

Removal of EU sanctions• EU agreed to lift all remaining sanctions on Myanmar and re-

instate generalized system of preferences, demonstrating commitment with new pro-democracy government in April 2013.

Unlocking Domestic Banks• US sanctions on financial transactions were lifted for 4 Myanmar

banks that have been linked to criminal organizations. Global brands like Macdonalds and Starbucks are looking to expand into local market with sanctions removed

Aid from rest of the world• Evidence of aid from rest of the world to help Myanmar to develop

through transition period. Global leaders have make their visits to country and express support.

18

Regulatory Issues: New Investment Law

Special Economic Zone

Law

Enacted in 2014

Allows Investors to obtain the required

investment licenses, permits

and approvals from management committee of

respective SEZs instead of

government ministries

Myanmar Union Tax Law

Updated from 2014 Union Tax Law

Change to put forth a series of changes in commercial tax regulations and

reduction in non-residential tax rate

Competition Law

Enacted on 24 February 2015.

Currently awaiting detailed

implementation rules

The law introduces basic framework to

regulate competition, monopolies, mergers and

acquisition and unfair trade

practices

Permanent Residences rules

Introduced in November 2014

Allowed foreign experts and former Myanmar Nationals to extend their stay and contribute to

economy

Changes In regulatory environment surrounding foreign investment

19

Allowed only if…

Disallowed if…

Myanmar Investment Commissio

n (MIC) permitting

SEE Law

prohibits

• Wholly Owned Foreign Business

• Joint Venture with Local Partner

• Investment made in line with contract

• Postal/Telecom and power industries cannot be carried out privately

Case by case basis

Government on a case by case basis, may permit these activities to be carried out by any person or economic organization, with

or without joint venture with the government, subject to unspecified conditions

Regulatory Issues: New Investment Law

Refer to appendix

Regulatory Issues: Screening of FDI

Submit proposal to MEPE/MIC or

Burmese Embassy

Supporting documents

include intended

activities and financial

credibility of company

Undertaking not to

engage in trading

activates as well as last 2

years of annual reports

Accepts or rejects an application within 15 days and decides

whether to approve proposal within 90

days.

Final approval

comes from U Zayar Aung,

Chairman of the MIC

(Currently Union

Minister of Energy)

MIC evaluates

foreign investment proposals

and stipulates the terms

and conditions of investment

permits

Submission stage Review stage

21

Dawei

• Joint project between governments of Thailand and Myanmar

• Plans to develop heavy industrial zone and a deep sea port that would open up trade routes to the Indian Ocean

Kyauk Phyu (south of Sittwe)

• Significant Chinese presence. China National Petroleum Corporation constructed huge oil pipelines to Yunnan

• Plans to establish oil tanker ports and warehouses and seafood processing zone

• First phase of development due for completion in 2016

Thilawa (outskirts of Yangon City)

• Joint project between governments of Japanese and Myanmar

• To focus on labour intensive garment manufacturing

• Infrastructure more developed

Regulatory Issues: Special Economic Zones

Source: IESingapore

Regulatory Issues: Special Economic Zones

22

Various tax holidays and benefits• 50% income tax relief on revenue from exports for next 5 years

• 50% income tax relief on reinvestment obtained from export sale for the subsequent 5 years

Various opportunities for foreign companies• Foreign companies can partner with project owners to offer operation and

management capabilities by adopting integrated approach across value chain

• Low cost of labour enables Myanmar to be the new manufacturing hub

Various opportunities for TEE International• Development of Infrastructure and Technology• Provide solutions package for utilities and waste solutions that comply to

international standards• Training of workers for tenants• Development of residential and commercial facilities in the surrounding

township• Bridge the infrastructure gap such as telecommunications and utilities

supply

23

Structure of Power Industry

Myanmar Electric Power Enterprise (MEPE)

• SOE controlled by Ministry of Electric Power (MOEP)

• Purchases electricity from public and private producers and sell it to various (decentralized) organizations for distributions

• Implements gas-fired projects, owns and operates the power grid

Hydro Generation Enterprise (HPGE)

• Government partner for all hydro-electric projects

• Operates and maintains all large scale public sector hydroelectric facilities

Various Electricity Supply Boards

• Yangon Electricity Supply Board (YESB) complement MEPE’s role as purchaser and distributor of power

• Operates on state and regional level

Electricity law 2014 governs the power generation sector. Formulating policy, preparing tariffs, advising MOEP, setting standards and performing inspections. Does not contain provision with respect to contractual framework. Most are left to individual project contracts.

Regulatory Issues: Power

24

Procurement Process

Investors are permitted to submit proposals directly to Government. Government have been welcoming foreign investments to power sector in Myanmar, as evidence by recent competitive tender for 250mw plant at Mingyan

No laws addressing grant of concessions, BOT or PPP projects. Such projects are governed by general law such as Myanmar contract act, Foreign Investment Law and Various Land Law.

Power projects are generally structured as JV or on a BOT basis. Theoretically, projects can also be structured on a build-own-operate (BOO) basis. Concessions are generally awarded at the conclusion of a series of negotiations with Government and agreement of more details.


25

Contracting Process

Phase 1: Submit expression of interest

- Investor and department of electric power execute MOU

- MOU must be approved by Attorney General Office, Ministry of National Planning and Economic Development and Ministry of Finance

Phase 2: Feasibility Study

- Investor carries out feasibility study

- If study produces favorable results, project maybe awarded to party who carried out the study or else may be publicly tendered on an open and competitive basis

Phase 3: Execution

- Execution of MOA between developer and DEP(Dep Environmental Protection)

- MOA is for a limited duration and it is enough to govern relationship between parties until power purchase agreement (PPA) is executed

Phase 4: Execution of various agreement

- For Hydro projects, investor and partner has to work with HPGE

-Future projects may combine phases 3 and 4, with result that all key project agreements with Government counterparties are executed prior to commencement of construction


26

Tariff and PaymentTariff is not regulated and is subject to bilateral

negotiation with MOEP/ HPGE or is determined by a competitive bidding process

Vary according to location and fuel source and not published. More PPAs have been addressing for inflation but formula vary for

different projects

Consists of fixed and variable elements and is denominated in US dollars

Tariff paid to generators is one of the highest in the region, but the retail tariff is one of the lowest.

Given level of subsidies, creditworthiness of offtaker is often an issue for developers and lenders.


27

Tariff and Payment

To provide safety net, past projects have enjoyed the following perks:

Payment in US dollars into an

offshore account

Advance payment

A letter of credit

A MOEP guarantee

Granted by a case by case

basis, with no reliance on

past success of projects


28

Permits and Approvals

Certificate of Environmental

Clearance

Foreign Investment permit

Registration of a local company with directorate of

investment ran company administration

Construction permits

Foreign Investors

should manage

their deadline

expectations

accordingly


29

Power Purchase Agreement (PPA)

Myanmar PPA

No Standard Form

Can be sophisticated

Lengthy negotiation time

Take or pay provision. Under supply provision for hydro are based on seasonal factors

Protection to change in law

Change In Law

Foreign Arbitration allowed

Force Majeure


30

Land Acquisition

Process of acquiring land and land related approvals can be difficult and requires approval

Land is designated into different categories (freehold, grant, farm, religious)

All land ultimately belongs to Government and citizens ay hold land with varying rights and obligations

MIC’s approval is required for foreigner to lease any land with 1> year. If land is owned by government entity, approval by government is then needed

Foreign Investors can obtain initial land tenancies of more than 50 years If they are in less developed regions of Myanmar with extension of 2 terms (10 years each)

There maybe some difficulties inherent in identifying overlapping of title deeds. During due diligence process, investors should confirm who is the atual owenr of land

Resettlement and compensation issues may arise depending on project


31

Project financing and taking security

Little experience of project finance in power sector, but

recent years structured financings have taken

place in mining, oil and gas and telecom sector

Foreign borrowings is permitted but subject to approvals from Mic and Central Bank of

Myanmar

MIC must approved the proposed debt to

equity ratio (generally preferred at 70:30)

Practical experience of implementation and

enforcement of security arrangements is limited in Myanmar.

Land is usually the preferred collateral in Myanmar for onshore

financing with domestic lenders.

Financing in Myanmar will be usually based on projected revenue of a project, not the credit worthiness of

the ultimate owners of project and collateral.


Tremendous potential for TEE

Tremendous potential for TEE: 3 area of Focus

33

Hydro

Solar

Telco

Tremendous potential for TEE: Infra

34

Minister of Finance U Win Shein claims that the country is badly in need for soft and hard infrastructure to narrow rural-urban gap

According to Logistics Performance Index (LPI), Myanmar ranked 145 out of 160 in 2014. Huge gaps in Infrastructure development

Over pass 15 years, electricity consumption in Myanmar has increased 1.5 times from 4 billion kWh to 6 kWh. (surpassing Laos and Cambodia)

Myanmar’s per capita electricity consumption still remains the lowest among the ASEAN-10 countries, at 100 kWh in 2010 compared to consumption of around 600 kWh in Indonesia and over 2000 kWh in Thailand

Even in popular cities like Yangon is plagued by frequent outages due to low electrification ate, low industrial development and lack of investment

Intention to further liberalized the sector through deregulation of prices, implementing appropriate taxes and elimination of across the board subsidies

Only allows foreign investments in production of electricity through hydro and coal via joint venture with state or on a BOT basis. (case by case basis)

TOP DOWN VIEW…

50% access by 2020, 75% access by 2025,

100% by 2030

35

Tremendous potential for TEE: Infra (Hydro)

Credentials• Vast rivers well suited for Hydro projects

• Hydro output has potential to be boosted by 30 times (100,000 MW)

• Many industrial zones and plans in Myanmar cannot be carried out due to lack of supply of electricity

• Heavy reliance on private sector for BOT contracts

• Hydro power accounts for 75% of country power, may hit 90% in monsoon seasons

• Construction of smaller, lower capacity dams is expected to target growing energy needs of household

• Decentralized off-grid solutions optimal

Challengers

• Current Tariff rates may be lower and unprofitable as compared to peers ($0.04/kWh) vs ($0.12/kWh) (for offtakers)

• Huge dam projects have been stalled due to local protests

• Intention of electricity being exported to neighboring countries

• Hydro is weather dependent. In dry season, insufficient water for dams to generate at full capacity

• Off take risk might be high for off-grid power supply

Hydro

36


Capacity (Hydro) Number of Potential Sites Potential Capacity (MW)

Less than 10mw 210 231.25

Between 10mw & 50mw 32 806.30

More than 50mw 60 45,293.00

Total 302 46,330.55

*Data as of 2013

80% of sites available

Number River Basin No. of Promising Hydro power

Projects

Installed Capacity

(MW)

1 Ayeyarwaddy

34 21,821

2 Chindwin 8 3,015

3 Sittaung 11 1,128

4 Thanlwin 21 17,641

5 Mekong 4 720

6 Others 14 1,776

Hydropower Potential by River Basin (including tributaries)Source: Ministry of Electric Power as presented in ADB 2012

Total of 92 potential sites for hydro power

Ranking Region and State Power Consumption (GWh)

1 Yangon Region 5,031

2 Mandalay Region 1,740

3 Nay Pyi taw (capital)

558

4 Magway Region 494

5 Sagaing Region 448

6 Ayeyarwaddy Region

324.3

Source: Ministry of Electric Power

37


38

Tremendous potential for TEE: Infra (Solar)

Credentials Challengers• Average, receives 5 KW/sq meter

per day of solar energy (can be used for heat and light source)

• Not an obvious choice but able to meet pressing needs in near-mid term. Can be Interim solution

• Better insolation that Cambodia, Laos and Japan and on par with Thailand

• Complement existing hydro capacity during dry season

• Can be installed instantly and not wait for strategy or funds to be developed

• Provide power quickly and able to sell excess power to the grid when connection is made. Excess power can be used to power base transceiver stations for telecomm companies, allowing vil-lages to profit and defray cost.

• Myanmar government can follow Laos example for solar electri-fication (16% to 71% in 15 years)

• Eastern area of country bordering Thailand and Laos lowest potential

• Southern area are overcast during rainy season (May to Oct)

• Too expensive for rural Myanmar, other cheaper alternatives might come into mind first

• Inferior Chinese imports without specifications deemed inferior

Solar

39

Tremendous potential for TEE: Infra (Solar)

40

Tremendous potential for TEE: Infra (Telco)

TelcoCredentials

Challenges

• In 2013, two new international telco players entered Myanmar, providing modern and affordable services due to change in telco laws

• Most underdeveloped in the world with tremendous potential. Amounting up to 55 million unconnected citizens as of 2014

• Myanmar has been ranked as world lowest rate of mobile penetration by ADB. With 1.2% in 2010 and 10% in 2013. Region average is at 78.2% and Vietnam’s rate is at 175%

• Local network provider MPT has forecasted CAGR of 49.5% for number of stations providing 2G and 3G services over the next 5 years.

• Government forecasting a 282% penetration growth rate for net 2 years

• Cost of SIM cards have dropped tremendously from $3000 to $200.

• Telco accounted for 31% of total FDI in 2014-2015

• Telco operators are set to face skill shortage, customers in conflict zones and deep-rooted inefficiencies in system

• Risk are high for these players and margin maybe tight

• Ooredoo reported receives 80,000 complain calls on average due to modern technology starved for half a century.

• Social media as a form of channel for social unrest

41

2 new foreign telco operators – Qatar’s Ooredoo and Norway’s Telenor – launched their respective networks

Mobile broadband subscribers having passed 8 million for with a population penetration of 15%

In July 2015, the MICT began the tender process to select the local partner in Myanmar’s fourth telecom operator.

In the first five months of the 2014/2015 fiscal year, telecoms accounted for 31% of total FDI of US$3.32 billion.

In August 2015, the MCIT issued a Request for Proposals (RfP) to obtain submissions for the lease of multiple satellite transponders through a condosat agreement.

In September 2015, MCIT published a draft Telecommunications Master Plan. China United Tele-comm Corp was contracted to construct the first international undersea cable linking China and Myanmar.

In September, a record high of 36 million mobile subscribers with a total penetration of 66% in September 2015

In November 2015 the MICT declared that once operators were ready to launch 4G networks in Myanmar, the ministry would release the necessary spectrum.

Reported 87 million new mobile subscribers had been added globally. 6% came from Myanmar

Telco Timeline in Myanmar 2014-2015


2015

2014

2014

2015

2015

2015

2015

42

1990199

1199

2199

3199

4199

5199

6199

7199

8199

9200

0200

1200

2200

3200

4200

5200

6200

7200

8200

9201

0201

1201

2201

3201

4201

50

10

20

30

40

50

60

Mobile cellular subscriptions (per 100 people) till 2014

Mobile cellular subscriptions (per 100 people)199

0199

1199

2199

3199

4199

5199

6199

7199

8199

9200

0200

1200

2200

3200

4200

5200

6200

7200

8200

9201

0201

1201

2201

3201

40

0.5

1

1.5

2

2.5

Internet users (per 100 people) till 2014

Internet users (per 100 people)

YEAR Users Population % Pen Internet GDP p.c.*

2000 1,000 54,021,571 0.00% US$ N/A2008 40,000 47,758,181 0.10% US$ 4792009 108,900 48,137,741 0.20% US$ 4592010 110,000 53,414,374 0.20% US$ 4692015 7,100,000 56,320,206 12.60% US$ 469

Source: International Monetary Fund

Source: World bank


43


Risk and Mitigation

45

Close monitoring

of turnaround

macro situation (3-6 months)

Partnership with locals

Ideal form of

risk mitigati

on

Risk and Mitigation

46

Risk Characteristics Mitigation

Weak Macro Framework Military rule closed countries doors, country possesses weak financial sector, relatively high inflation level. Economic

needs to be reformed and undergo liberalization

Fiscal Policies: Government set to strengthen tax revenue% GDP,

Establishment of foreign banks Monetary Policies: Stabilization of

exchange rate, more autonomy given to Central Bank Of Myanmar.

Political Country has been under military rule for 50 years. New incoming party (NLD) is

seen as inexperience after winning 2015 election by a landslide. Tensions to occur as to whether Military government will over ride results (happened in 1990). New President yet to be announced

Opposition leader Aung San Suu Kyi’s party (NLD) won 80% of

elected seats in new parliament. USDP now occupies remaining seats and agree to work with

opposition. New government will be seen as national reconciliation

government Healthcare and Education 1 in 4 people remain poor, 1 in 3 children

(< 5) remain underweight as of 2012.

Vulnerability to malaria, tuberculosis, HIV/Aids and other diseases remain higher in Myanmar than its peers

(Maternal mortality is 240 deaths per 100,000 live births, significantly above

the neighboring countries like Thailand). Life expectancy is 62 years, one of

lowest in region

Government has increased healthcare and education

spending significantly 7.5% GDP up from 5.4%. Primary education

completion rate has reached 103% in 2010 and more hospital beds and physicians are available for every 1000 Myanmar Citizens

Public Sector Reform Organization and governance is weak, leaving room for mismanagement.

Myanmar government since 2011 has been undertaking major

reforms, by improving revenue management and tax collection.

State owned companies are being scaled down from many sectors

and getting privatized. New government is expecting to further enhance legislation.

Risk: Worldwide Governance Indicator

47

Aggregate Indicator (index)

Percentile Rank 1996

Percentile Rank 2014

Difference Margin of Error

Voice & Accountability

1.4 9.4 +8 5%

Political Stability and Absence of Violence Terrorism

10.1 11.7 +1.6 10%

Government Effectiveness

6.3 8.7 +2.4 5%

Regulatory Quality

3.9 6.3 +2.4 10%

Rule of Law 6.7 8.7 +2 10%

Control of Corruption

2.9 17.3 +14.4 10%Source: Worldwide Governance Indicator

LOW BUT IMPROVIN

G

• Percentile ranks indicate the percentage of countries worldwide that is lower than the indicated country, so higher values indicate better governance scores.

• Results are based upon 90% confidence interval level.

Methodology

Methodology

49

What to look out

for at Macro Level

What to look out

for at TEE Level

Methodology: Macro Level

50

Indi

cato

r

Inflation level to be controlled at healthy

level

Increase in domestic savings/tax efficiency

Industrial shift from agriculture

More economic diversification (move into manufacturing)

Reduce SOE stake in production

Boost consumption

Fiscal Stimulus and Development of

country

Increase growth

Less reliant on commodities

Increases competition and reduces corruption

TEE has to make sure if such indicators are having improvement. Awaiting time to be 3-6 months of market monitoring

Methodology: TEE Level

51

Joint Venture with Locals

Offer training and development for

locals

Off-taker creditability

3 Area of

Focus

Methodology: Project Financing

52

ANZ Bank

Industrial and Commercial Bank of China

Bank of Tokyo-Mitsubishi UFJ

Sumitomo Mitsui Banking Corp

Mizuho Bank

Malaysia’s Malayan Banking Berhad (Maybank)

Bangkok Bank

Overseas-Chinese Banking Corporation

United Overseas Bank

Foreign borrowings is permitted but subject to

approvals from Mic and Central

Bank of Myanmar

MIC must approved the

proposed debt to equity ratio (generally

preferred at 70:30)

Methodology: TEE Level

53

Decides to Venture into Myanmar

3-6 months Macro monitoring due to near term political outlook

Express interest/procurement to

Government Sector (MEPE/MIC)

Local Partner

comes in

Contracting process (Tariff, Off-taker)

*Training and hiring of locals stated)

Permits and Approvals from Government Construct

Project Financing (foreign banks in

Myanmar)

54

Appendix: Myanmar Profile

Population: 53.5 million

Capital: Naypyidaw

Largest City: Yangon

Official Language: Burmese

Top 3 Ethnic Group: 68% Burmese, 9% Shan, 7% Karen

Religion: Theravada Buddisim

Government: Unitary Presidential Republic

President: Thein Sein (outgoing)

Area: 676,578 km sq.

Appendix

56

Appendix: New Investment Law

Allowed if:a. A wholly-foreign owned company in business

permitted by Myanmar Investment Commission (MIC)b. A joint venture between a foreign investor and a

local partner (Myanmar citizen or a government department organization)

c. Investment made in line with systems specified in contract set by both foreign investor and local parties

(BOT, BTO arrangements)

For Joint Venturesa. Ratio of foreign and local capital may be

specified and agreed by both foreign and local parties entering in JV. MIC shall specified minimum

amount of investment required depending on sectorb. Extensive list has been issued by MIC with regard to the type of foreign investment allowed in JV with

Myanmar partners with minimum of 20% shareholdings

Foreign Investment Restricteda. State-owned Economic Enterprise Law (SEE law)

specifies certain economic activates that are closed to private investment and can only be carried out by the

government- Postal and telecom services

- Electricity generating services, other than those permitted by law to private and cooperative

electricity generating services

b. Government on a case by case basis, may permit these activities to be carried out by any person or economic

organization, with or without joint venture with the government, subject to unspecified conditions

Sectors allowed for Foreign Investmenta. Investment proposals submitted to MIC are

considered case by case basis by MIC. - Businesses that foreign investors are prohibited to

carry out- Businesses that foreign investors are allowed to carry out only in form of JV with Myanmar citizens- Businesses that foreign investors are allowed to

carry out in the form of joint venture with Myanmar citizens and with recommendations of the relevant

ministry

Foreign Investment Law

57

Appendix: Historical Taxes % GDP

58

Appendix: Historical Healthcare Spending

59

Appendix: Myanmar World Health Organization Profile

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Appendix: Myanmar World Health Organization Profile

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Appendix: List of projects in MyanmarProject Title Country Project ID Commitment Amount Status Approval DateNational Electrification Project Myanmar P152936 400.00 Active 2015-09-16T00:00:00ZMyanmar EITI Implementation Grant Myanmar P143321 0.35 Closed 2015-05-18T00:00:00ZAgricultural Development Support Project Myanmar P147629 100.00 Active 2015-04-23T00:00:00ZAyeyarwady Integrated River Basin Management Project Myanmar P146482 100.00 Active 2014-12-09T00:00:00ZMM: Telecommunications Sector Reform Myanmar P145534 31.50 Active 2014-02-06T00:00:00ZElectric Power Project Myanmar P143988 140.00 Active 2013-09-24T00:00:00ZMyanmar National Community Driven Development Project Myanmar P132500 80.00 Active 2012-11-01T00:00:00ZIrrigation Ye-U Rehabilitaion and Modernization Project Myanmar P003367 14.00 Closed 1986-08-26T00:00:00ZIrrigation Project - Groundwater Myanmar P003357 14.00 Closed 1983-06-07T00:00:00ZIrrigation Project - Tank Myanmar P003358 19.00 Closed 1982-12-21T00:00:00ZNyaunggyat Dam Multipurpose Myanmar P003350 90.00 Closed 1980-05-29T00:00:00ZTelecommunication Project (02) Myanmar P003352 35.00 Closed 1979-11-27T00:00:00ZLower Burma Paddyland Development Project (02) Myanmar P003348 34.50 Closed 1978-07-06T00:00:00ZLower Burma Paddyland Development Project Myanmar P003343 30.00 Closed 1976-06-15T00:00:00ZTelecommunications Project Myanmar P003342 21.00 Closed 1975-05-27T00:00:00ZIrrigation Project Myanmar P003340 17.00 Closed 1974-06-13T00:00:00ZMyingyan Power Generation Project Myanmar P151366 100.00 Dropped

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Appendix: Sembcorp venture in Myanmar

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