At a Thai bank (Photo: AFP/VNA)

Bangkok (VNA) – Thai Government has approved a concessional loan worth 1.45 billion baht (45.7 million USD) to help Myanmar improve its electricity system.

Rachada Dhnadirek, Thailand’s deputy government spokeswoman, said on July 14 that the loan is part of the country’s initiative to strengthen ties with neighbouring countries.

According to her, Thailand’s Neighbouring Countries Economic Development Cooperation Agency (NCEDC) will be responsible for arranging and extending the loan to Myanmar. The sum is earmarked for the construction and improvement of electrical substations and transmission systems in Yangon.

Myanmar will be charged an interest rate of 1.5 percent per year with a 30-year contract which includes a 10-year grace period. Under the terms of the loan agreement, 50 percent of goods and services in the power grid projects must come from Thailand. Myanmar must also enlist a Thai construction contractor and consultant engineer, while the rules governing the loan agreement must be issued by Thailand.

Thailand is currently the third-largest investor in Myanmar after Singapore and China./.

VNA