October 2, 2012 / 9:25 PM / 5 years ago

A look at Tokyo's bet on Myanmar

THILAWA, Myanmar (Reuters) - The centerpiece of Japan’s investment in Myanmar is a 2,400-hectare (5,900-acre) special economic zone in Thilawa, strategically located on the edge of the commercial capital, Yangon, and the Indian Ocean coast.

Japan would provide an estimated $12.6 billion in aid to build infrastructure around Thilawa, three officials with direct knowledge told Reuters.

Mitsubishi Corp, Marubeni Corp and Sumitomo Corp. will form the Japanese side of the joint venture in Thilawa with a 49 percent share. They would work with a consortium of Myanmar businessmen who are expected to include longtime cronies of the military-backed government.

The plan is to build the first 450 hectares (1,111 acres) of the industrial park by 2015 and start luring Japanese and global manufacturers.

Myanmar’s parliament is working on a new foreign investment law, and is revising legislation governing economic zones.

A key part of the plan would address Myanmar’s dire shortage of electricity. Only a quarter of the population has access to power. Around $900 million is planned for a 500-megawatt power plant that would supply electricity to Thilawa and Yangon, the crumbling city of six million a half-hour’s drive from the industrial park, Marubeni says.

Japan is also investing in an economic zone in Dawei on the southern peninsula, where the largest industrial complex in Southeast Asia is on the drawing board.

Reporting by Antoni Slodkowski; editing by Bill Tarrant

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