While being the highest generator of revenue for the country, the oil and gas industry is also responsible for accepting half of the loans taken by the country, said Daw Moe Moe Tun, civil society representative of the Extractive Industries Transparency Initiative (EITI) during the release of its report on Myanmar.

“The contribution of revenue by Myanma OIl and Gas Enterprise (MOGE) to the State is the highest at 47.5 percent. But it is also responsible for half the country’s debt. Myanmar has taken loans for many offshore projects such as pipeline construction, mostly from China,” she said.

Myanmar currently owes China $850 million for the South East Asia Crude Oil Pipeline project, $ 560 million for the South East Asia Gas Pipeline and Shwe Offshore Development projects, $ 243 million for the Yadana-Yangon domestic pipeline project and $ 80 million for an onshore oil exploration project, according to debt list.

“The main reason for accepting loans from the Chinese for the China pipeline is that the country was under US sanctions at the time. The loans were taken at an interest rate of 4.5percent with a five-year grace period and 30 years payback,” said  U Than Htay Aung, MOGE technician and government representative of the Myanmar Extractive Industries Transparency Initiative.

So far, MOGE has taken loans of up to $1.9 billion from China as well as Japan, Thailand and India. As at March 2016, MOGE had repaid $137.4 million of its total debt.

Myanmar began repaying its loans to China in 2015 and will continue to be indebted to the Chinese until 2031, assuming it is consistent with its repayments.

Myanmar will start repaying a loan from the Japan International Cooperation Agency from 2023 onwards until 2053.