Russia and Myanmar junta strike deal for Dawei SEZ project in Tanintharyi Region

Myanmar's military junta and Russia have signed a Memorandum of Understanding (MoU) to cooperate on investments in the Dawei Special Economic Zone (SEZ), covering port and energy projects, Russian news agency Interfax reported Monday.The Russian news outlet indicated that the MoU was signed during Russian Minister of Economic Development Maxim Reshetnikov’s visit to Myanmar. He reportedly met with Dr. Kan Zaw, the junta’s Minister of Investment and Foreign Economic Relations.The agreement includes projects such as a port, a coal-fired power plant, and an oil refinery, which Russian companies based in Myanmar will implement.The Dawei Special Economic Zone covers nearly 195 square kilometers in the southern Tanintharyi region, just north of Dawei city, near the Andaman Sea and the Gulf of Thailand. The project holds strategic importance, featuring a deep-sea port, industrial zone, electricity infrastructure, and other key developments.Russia’s Maxim Reshetnikov told reporters on Sunday that constructing the oil refinery plant will be part of the project. However, he added the agreement has yet to be finalized due to a “financial challenge.”The MoU was signed the day after a meeting in Naypyidaw between junta and Russian officials, where they discussed boosting bilateral trade and economic cooperation.During the meeting, nine agreements covering economic infrastructure, banking, education, telecommunications, technology, and humanitarian cooperation were signed, according to a junta-controlled state newspaper. Yet no specific details about the new Special Economic Zone were disclosed. Myanmar Now attempted to contact U Aung Soe, Chairman of the Dawei Special Economic Zone Management Committee, regarding Russia’s investment commitment, but he did not respond by the time of publication.On December 5 in 2022, Maxim Reshetnikov visited Naypyidaw, Myanmar’s capital, where he met with Sen-Gen Min Aung Hlaing. An anonymous source familiar with the project confirmed to Myanmar Now that Russia is set to become an official investor in the project, but it is going to take time before precise details are released.In 2008, Myanmar’s military government inked a deal with Italian-Thai Development Public Company (ITD) to develop the Dawei deep-sea port project, a major infrastructure initiative aimed at boosting regional trade. However, the project stalled during President Thein Sein’s administration, primarily due to a lack of funding.The suspension left the ambitious project in limbo, casting uncertainty over its future and highlighting the broader challenges of financing large-scale developments in the region. While Italian-Thai Development was allowed to proceed with part of the project, the company was ultimately removed in January 2021, just before the military coup. Although the governments of Myanmar, Thailand, and Japan had committed to a trilateral collaboration on the project, it never materialized. A monk studies a map of the Dawei oil project site, originally planned for construction with billions of US dollars in investment back in 2012. (Photo: AFP) After nearly 16 years of stagnation, the regime is now looking to Russian assistance to restart the project. But with the war affecting almost every corner of the country, the project faces serious hurdles, a businessperson based in Tanintharyi told Myanmar Now. “This project has been in discussion since 2008. Thai companies were previously involved in certain segments,” he said. “We are geographically close, yet even those efforts could not be successfully implemented.” Ongoing clashes between junta forces and local resistance groups continue to disrupt the area around the special economic zone, and reports show little progress on the project, except for the establishment of a military base. On January 21, the junta-appointed Chief Minister of Tanintharyi and the Russian Ambassador met in Dawei. In meetings, they also discussed the development of the Dawei Special Economic Zone and other development aims in Myanmar’s southern region.

Russia and Myanmar junta strike deal for Dawei SEZ project in Tanintharyi Region

Agreement includes port, power plant, and refinery projects despite continued nationwide conflict

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