THE oil-rich gulf state of Kuwait on Thursday announced it would give Cambodia in excess of US$546 million in soft loans for an array of infrastructure projects, primarily in the agricultural sector.

The loans represent the second-largest influx of cash to the Kingdom's coffers from a single country, after China, which last year gave some $601 million.

Sin Bunthoeun, spokesman for the Ministry of Foreign Affairs and International Cooperation, said that $486 million of the loan will be used to construct irrigation systems and a hydropower project on the Steung Ser River in Kampong Thom province, and the remaining $60 million will go to road construction in Battambang province.

The loans were announced after a meeting between Cambodian and Kuwaiti officials at the Ministry of Foreign Affairs on Thursday. "Kuwait wants to invest in Cambodia and help to develop the country as fast as possible," Sin Bunthoeun said. "The Cambodian government has strong ties with the Kuwaiti government," he added.

Sam Sarith, secretary of state for the Ministry of Water Resources and Meteorology, said the financial assistance would help Cambodia realise its aim of becoming a major rice exporting nation. "The Cambodian government is working on hydropower and irrigation projects and has a five-year plan to develop the country's agriculture. We have the ideas, we only lack money," he said.

Bun Uy, secretary of state for the Council of Ministers, said Kuwait's assistance will strengthen Cambodia's economy. "Cambodia is a country that relies on agriculture and our rice plantations depend on rain. Modern agricultural methods will increase our rice production."