CDC makes first direct equity investment in Myanmar

It comes five months after the development finance institution’s debut direct deal in Nepal, which provided $15 million to local lender NMB Bank. CDC is expected to invest $1.7 billion over the next three years in India and its neighboring South Asian countries, including Myanmar.   

Frontiir is considered Myanmar’s largest and fastest-growing internet provider, with more than two million users and some 1,600 employees. The company plans to expand its coverage to 22 cities by 2022, including more lower-income townships around Yangon and Mandalay. This effort will entail the hiring of an additional 4,000 staff.

Wai Lin Tun, chairman and CEO of Frontiir, said in a statement that expanded internet availability could see foreign direct investment in Myanmar triple during the next three years. He described the CDC investment as “an accolade we believe demonstrates that an ethical, fair, and sustainable business model can still lead to great success amidst huge challenges in an emerging country like Myanmar.”

Despite recent growth in Myanmar’s mobile broadband penetration, access to digital services is poor and presents a challenge for business development. Data usage remains unaffordable and even inaccessible in rural and low-income areas. Frontiir claims that it can provide unlimited internet for millions of people for as little as $0.13 per day.

CDC has previously supported Myanmar’s telecoms space with participation in two direct debt investments in 2015 and 2016 worth a total of $50 million that underpinned a tower expansion by Yangon-based Irrawaddy Green Towers. Other exposure to the country includes LP commitments to recently closed funds by local private equity firms Delta Capital and Anthem Asia.

Growing investor interest in Myanmar in recent months has been attributed to government liberalizations and improved confidence in economic growth. Since the closures by Delta and Anthem, at least two more country funds have been established, including the debut vehicle from Ascent Capital and a consumer and infrastructure-focused fund from Japan’s Daiwa Securities Group.

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• Topics
• Southeast Asia
• South Asia
• Expansion
• Consumer
• Myanmar
• CDC Group