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Exclusive: ADB may offer more than $1.5b in new funding

Thong Sotha​​   On July 15, 2020 - 2:36 pm​   In Investment  
Exclusive: ADB may offer more than $1.5b in new funding ADB Cambodia Country Director Sunniya Durrani-Jamal and Minister of Economy and Finance Aun Porn Moniroth. ADB

Asian Development Bank (ADB) is proposing to provide $1.5211 billion of new funding in its updated Cambodia country operations and business plan (COBP) 2021-2023 according to the report of the Khmer Times.

The proposed COBP has a total of 21 development projects over the three years, which includes $1,257.7 million of concessional lending, $70.4 million of grants, and $193.0 million of co-financing.

According to ABD Country Director Sunniya Durrani-Jamal, the new plan takes into account the likely effects of COVID-19 and includes new projects and programs to support Cambodia’s recovery.

The information was disclosed to Khmer Times during an interview on the new $250 million concessional loans announced by the ADB last week.

To put the proposed COBP into context, according to a 2020 World Bank report, Cambodia currently holds approximately $1.4 billion in loans from the ADB which would now increase to $2.6 billion over the next three years.

China holds 47 percent of Cambodia’s total debt, currently approximately $3.6 billion.

During the interview with Khmer Times, Sunniya Durrani-Jamal also outlined the highly concessional terms of the new $250 million loan funded through the COVID-19 Active Response and Expenditure Support (CARES) Programme.

“The terms of loan financing are highly concessional with a 24-year term, including a grace period of eight years, with an interest charge at the rate of 1 percent per annum during the grace period and 1.5 percent per annum thereafter,” she said.

She added, “The ADB understands also understands that Cambodia operates in a regional environment and hence the loan is part of much greater $20 billion expanded assistance package for other developing members in the region.”

While the bank has not earmarked the number of funds for any specific purpose, a committee has been established to ensure the funds are directed into three key areas of pre-determined assistance.

First is the country’s immediate health response, second social assistance through the expanded ID Poor program, and third financial assistance for struggling micro, small and medium enterprises (MSMEs) through access loans with lower interest rates and easier approval processes for a loan.

In addition to hard cash funding, Durrani-Jamal also said the ADB ties technical expertise to the assistance it provides as well as appropriate monitoring and consultations with the private sector and civil society organizations.

“The program includes a country engagement framework that will ensure the government and ADB continue a policy dialogue around the implementation and monitoring of Cambodia’s COVID-19 response,” she said.

“The framework will include consultations with the private sector and civil society organizations. The program is also linked to ongoing ADB support for public finance management reforms to strengthen governance and transparency and improve efficiencies in budget and policy development, expenditure tracking, and audits,” she added.