SET-listed Italian-Thai Development Plc (ITD) has signed an agreement with the Myanmar government to start developing the first phase of the Dawei megaproject immediately.
ITD expects to sell 16,000 rai of developed land in the first phase over the next few years.
President Premchai Karnasuta said the company had received a US$1.7-billion loan from the International Finance Corporation and the World Bank to be used as the first tranche of funds for Dawei.
But the International Finance Corporation said it had not extended the loan as preliminary talks were still ongoing for the financial support of the initial phase of the project.
Mr Premchai added he was also in talks for other sources of funds.
"Besides the two international financial institutions, we're also in talks with local banks about additional funds for the next phase," Mr Premchai said.
He said Bangkok Bank and Siam Commercial Bank were interested in participating.
"We expect to finalise the size of the loan and the interest rates with the local banks shortly," Mr Premchai said.
Of the total investment budget of $1.7 billion, some $500 million will go to a 450-megawatt gas-fired power plant. ITD plans to invest in an additional coal-fired power plant once the Dawei industrial zone is fully developed.
Another $500 million will be spent on a petrochemical plant and oil refinery to serve demand at Dawei. PTT Plc and Shell Co of Thailand have expressed interest.
"We are in talks with the two petroleum giants and expect to reach an agreement in the coming weeks," Mr Premchai said.
Thailand and Myanmar previously agreed on a master plan for Dawei development with an industrial estate spanning 132 square kilometres, a deep-sea port capable of handling 170 million tonnes of goods and 5 million 20-foot equivalent units a year, a four-lane road linking the Thai border with Dawei, water supply and treatment, and power plants.
ITD and its consortium partners have signed a concession agreement with the Myanmar government, securing the rights to develop Dawei for 50 years. The concession could then be extended for 25 years.
Plans call for developing the first plot of 700 rai, with the land going on sale by next year with full facilities such as power plants, waste management and logistics. The company will then develop a further 3,000 rai in 2017.
The first phase of the Dawei industrial estate will consist of investment from sectors such as electronics, garments and tyres.
"And within the next few years, the auto parts sector will come and attract automotive-related industries and huge investment from giant Japanese car makers," Mr Premchai said.
ITD shares closed yesterday on the SET at 7.65 baht, unchanged, in trade worth 292 million baht.