France grant major loans to boost Cambodia’s growth, development
FRANCE, through its development agency AFD, will provide sovereign loans of over $230 million to support Cambodia’s economic growth and human resource development.
Ros Seilava, secretary of state at the Ministry of Economy and Finance, and MarieHelene Loison, deputy CEO of AFD, signed three financing agreements in the fields of potable water, energy and vocational training, during Prime Minister Hun Manet’s official visit to France last week.
The agreements, amounting to €215 million (about $234.4 million), were signed on January 18, as stated in AFD’s press release.
It said the agency will finance around $131 million for the third phase of the Bakheng Water Treatment Plant, operated by the Phnom Penh Water Supply Authority (PPWSA).
According to the press release, the facility will be one of the largest in Southeast Asia with a total capacity of 600,000 cubic metres per day and is noted for its exceptional construction quality, technology, energy efficiency and water quality.
“This will meet the growing needs of residents and businesses in Phnom Penh and its suburbs. Additionally, an AFD financing facility of €80 million [$87.21 million] is planned for 2024 to upgrade, renovate and expand the transmission and distribution network,” said the release.
“A grant from the European Commission, pending approval this year, will complement the loan to enhance the social and environmental impact and sustainability of the investments. This Team Europe project is one of the EU’s Global Gateway flagship investments for Cambodia, launching in 2024,” it added.
AFD has also provided approximately $76 million to Electricite du Cambodge (EDC) to expand its transmission network and equip it with a battery storage capacity of 75 megawatt hours (MWh).
It said this is among the largest battery energy storage system (BESS) capacities in the region, helping to accelerate the integration of renewable energy sources like solar and wind, making the national grid greener and more reliable.
In the field of vocational training, AFD’s loan of approximately $27 million, complementing an $80 million loan from the Asian Development Bank (ADB), will support the Ministry of Labour and Vocational Training, intended to develop high-level training, strengthen human capital and aid the country’s transition towards a technologyand science-supported industry-driven economy.
AFD’s Loison said the three loans underscore France’s commitment to enhancing the relationship between the two countries.
“On the occasion of AFD’s 30th anniversary in Cambodia, these three projects mark a new stage in our bilateral relationship, showcasing AFD’s commitment to intensify its partnership with Cambodia. This is in support of sustainable and climate-resilient infrastructures, as well as human capital development in Cambodia,” she said.
“In 2024, AFD will continue to work in the fields of energy, water and sanitation, human resources and rural development for the benefit of the Cambodian people,” she added.
Seilava noted that AFD has been a key development partner in Cambodia’s growth, reflecting France’s commitment to the country.
“As Cambodia has advanced beyond the early stages of development, we are rightly focusing on water supply, energy and human development. These areas are crucial for addressing developmental challenges and positively impacting our economic growth,” he said.
“With AFD’s robust development support, Cambodia’s economy has grown, overcome global challenges and is set to continue progressing, building more success stories,” he added.
Seilava explained that the finance ministry will actively support the development of key priority sectors, including digital and high-tech industries that involve innovation or research and development (R&D).
He said the aim is to attract private sector investment, in alignment with the initial phase of the government’s Pentagonal Strategy.
“We look forward to new collaborations that will create a strong, robust and high-quality living environment for the people of Cambodia,” he added.
Since its inception in 1993, AFD has significantly contributed to the Kingdom’s development, with total financing exceeding €1.5 billion ($1.635 billion), including the new commitments, as per the agency.