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21/09/2007

FAO Mobilizes US$31.4 million Funding for Irrigation and Drainage Schemes in Myanmar

Technical Cooperation Department, Rome - FAO’s prompt response in preparing a project blueprint for the construction of irrigation schemes in the drier regions of Myanmar has mobilized US$31.4 million worth of funding from both the OPEC Fund for International Development (OFID) and the Government of Myanmar. Thanks to the Technical Cooperation Programme (TCP) Facility, FAO was able to quickly mobilize the funds necessary to produce a project formulation report.

Insufficient rainfall in the central dry zone

Myanmar’s agriculture sector accounts for around 40 percent of its Gross Domestic Product (GDP), and employs over 50 percent of the total national work force. 75 percent of the national population, or some 36 million, live in rural areas - most of whom are directly or indirectly dependent upon agriculture for their livelihoods.

Rainfall patterns in Myanmar are seasonal. Annual rainfall is concentrated in the monsoon period – about 4 to 5 months, followed by long dry spells of dry season. The heavy monsoon rainfall allows for a single season rain-fed paddy crop in most parts of the country but in the central dry zones supplemental irrigation is essential, even in the so-called “wet season”. Development of irrigation and drainage facilities has always been a high priority for the government of Myanmar but the central dry zone required special attention.

Rapid project formulation required

The Government of Myanmar requested a loan from the OFID to finance the completion of two irrigation and drainage schemes in support of a “Water Sector Improvement Project” in the dry regions. The project objective was to complete the construction of irrigation and drainage canal distribution networks, and associated water control structures with a view to promote high agricultural output and increase income and living standards of the small-scale farmers.

OFID funding for this project was dependent on the prompt development of a project formulation report, which had to be carried out in a space of six weeks. “OPEC needed the TCP Facility to formulate the project promptly”, said Mr Xueming Liu, an economist with the FAO Investment Centre.

An honest broker linking beneficiary countries with finance institutions

At a total cost of US$155 000, FAO produced a project report that would adequately meet the technical requirements of the OFID, and enable it to promptly appraise the project for financing.

“The Technical Cooperation Programme acted as an honest broker linking the beneficiary countries with the financing institutions” said Liu.

The OFID will provide a loan of US$20 million which will mainly finance the civil works, equipment and machinery, while the Government of Myanmar will provide about US$11.4 million. The irrigation schemes would cover a net area of 38,000 ha benefiting 14,000 smallholder farm families (80,000 persons).

More information at : http://www.fao.org/tc/tcp/index_en.asp