Construction sector in Myanmar expected to receive share of COVID-19 loans

The government will deploy its seventh tranche of COVID-19 loans, this time to about 300 business affected by the pandemic, in the first week of July.

Construction businesses are likely to be considered for next loan tranche from the K200 billion to K500 billion pool under the government’s COVID-19 Economic Response Plan released on April 27, according to the Union of Myanmar Federation Chamber of Commerce and Industry.

Due to the outbreak of COVID-19, new construction projects have come to a standstill and construction materials needed for existing projects have been delayed and many are up to four months behind schedule , said U Myo Myint, Managing Director of MKT Construction.

“The materials were supposed to have arrived in January but these only came in May as many overseas factories producing building materials like steel have closed,” he said. Other essential items like elevators, aluminum products and tiles have also been delayed, and this has held back work in the construction sector.

U Shein Win, chair of the Myanmar Construction Entrepreneurs Association said there are also limitations in distributing items from Yangon to other towns, and this has contributed to delays in projects across the country.

U Kyaw Kyaw Soe, a committee member of the association added that import prices for construction materials have risen, leading to insufficient budgets for some projects.

While some construction has resumed in parts of the country, insiders warned that activity over the next few months is likely to be tepid due to the rainy season, which typically falls between June and October.

Construction activities are usually at their peak between March and May, said Ko Naing Win, a director at Steel Mart Construction Materials.

Whatever the case, the authorities are still discussing how and where it will disburse the next tranche of loans, said U Aung Naing Oo, Permanent Secretary of the Ministry of Investment and Foreign Economic Relations. It has so far received a total of 4,258 applications for the loans since March 30.

Under the sixth loan tranche, total funds disbursed amounted to K86 billion, he added.

Since the first cases of COVID-19 were reported in Myanmar on March 23, the government has channeled more than K160 billion towards preventing, controlling and responding to the outbreak. The bulk of the funds – around K109 billion – have been distributed as low-interest loans to Myanmar businesses in manufacturing and tourism affected by COVID-19 as at June 18.

The government said it will also has also prioritise the agriculture and livestock sectors for this round of financing, said U Aung Naing Oo.