17 May 2019
THAILAND: Chinese and Japanese Banks Agree Eastern Economic Corridor Funding Deal
The Thai cabinet has approved a Memorandum of Understanding (MOU) to be signed with two overseas banks – China’s state-owned China Development Bank (CDB) and the Japanese government-owned Japan Bank for International Cooperation (JBIC) – with regard to the financing of investment projects in the Eastern Economic Corridor (EEC), which straddles the country’s eastern coastal provinces of Chachoengsao, Chonburi and Rayong. The MOU is scheduled to be signed during the Japan-China Cooperation in Third Countries Symposium, which will be held in Beijing on 21 May this year.
Under the terms of the MOU, the EEC Investment Office, the primary signatory on the Thai side, will coordinate with the relevant Thai government agencies to provide information related to ongoing and planned EEC projects as well as any associated investment-related incentive schemes. For their part, the two overseas banks will promote EEC investment among prospective outbound investors in their respective home countries, while also providing financing to those interested in expanding into the EEC.
Detailing projects with a collective estimated cost of Baht 1.5 trillion (US$45.36 billion), the EEC Development Plan is intended to boost Thailand’s economic growth by attracting foreign direct investment into 10 high-tech industry sectors – smart electronics; next-generation cars; digital services; high-end medical and wellness tourism; agriculture and biotechnology; food; industrial robotics; logistics and aviation; biofuels/biochemicals; and the provision of medical services.
The EEC is also expected to boost overall connectivity and help Thailand develop into a regional transport hub for the Greater Mekong Subregion by linking the three aforementioned Thai coastal provinces with Myanmar’s Dawei deep-sea port project, Cambodia’s Sihanoukville port and Vietnam’s Vung Tau port. In line with this, the financing of a high-speed rail project linking the Suvarnabhumi and Don Mueang airports (both of which serve Bangkok, the Thai capital) with the EEC’s U-Tapao Airport, has also been prioritised under the terms of the MOU.