Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia gets $118M in sovereign loans from AFD



Cambodia gets $118M in sovereign loans from AFD

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Agence Francaise de Developpement has provided Cambodia with a sovereign loan of $121 million for two projects – one to build the Bakheng water treatment plant and another to develop competitive skills. Ministry of Economy and Finance

Cambodia gets $118M in sovereign loans from AFD

Agence Francaise de Developpement (AFD) has provided Cambodia with a sovereign loan of 118 million euros ($121 million) for two projects – one to build the Bakheng water treatment plant and another to develop competitive skills.

Minister of Economy and Finance Aun Porn Moniroth who is also the director of AFD’s agency in Cambodia, signed the sovereign loan agreement for the projects on December 24, a press release from the ministry said.

AFD will provide an additional 100 million euros in sovereign loans to build the Bakheng water treatment plant following the success of phase I. The project will see the construction of a water pumping station that can produce 195 cubic meters of clean water per day.

The project is also aimed at monitoring the construction work and strengthening the capacity of the Phnom Penh Water Supply Authority officials in the procurement and installation of water distribution networks.

In the project to develop competitive skills, the AFD will provide an additional 18 million euros of sovereign loans through co-financing with the Asian Development Bank (ADB).

The government will undertake the project, which has the Ministry of Labour and Vocational Training as the project operations agency while the ministries of Education; and Economy and Finance are project-implementing agencies.

The project serves to improve and promote the quality of technical and vocational training in post-secondary education and promote education and work across industries.

The project also aims to strengthen the financial management mechanism of the institute of technical and vocational training.

“The financing of these two projects meet the needs of the Royal Government of Cambodia in the areas of human resource development through the promotion of professional knowledge, vocational skill, entrepreneurship, and development sectors of city and town infrastructure,” the press release said.

Ministry of Economy and Finance spokespersons, Kim Sopheak and Meas Sok Sensan, could not be reached for comments on Tuesday.

People’s Centre for Development and Peace president Yong Kim Eng told The Post on Tuesday that the sovereign loan was one of the things that helped improve the people’s access to development, but it was important for Cambodia to be transparent in managing the funds.

“Some concessional loans, whether interest-free or low-interest, have to be repaid. So the important thing is to manage the expenditure effectively and transparently for the taxpayers so that they are happy to help pay it back via taxes,” he said.

Kim Eng said if the management of these projects was not transparent or of poor quality, it would solicit the people’s criticism, and the French would be more cautious when dealing with Cambodia.

From 1993 to December, France provided around 802 million euros of cooperative financing, of which 201 million euros were financing, sovereign loans (434 million euros), and non-sovereign loans (167 million euros), said the Ministry of Economy and Finance’s press release.

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