The Japan Bank for International Cooperation (JBIC) has signed an ODA loan agreement totalling Y4.313bn (US$42mn) with the government of Cambodia for the Sihanoukville Port Urgent Expansion Project.
The loan had been pledged by Prime Minister Junichiro Koizumi to Cambodian Prime Minister Hun Sen at the Asean-Japan Commemorative Summit in December 2003.
The Sihanoukville port is the Cambodia’s only international open sea port located in Sihanoukville City, 240km south of the capital city of Phnom Penh. The loan will finance the improvement and expansion of the container berth, the installation of large cargo handling machinery in the port and related consulting services to deal with sharply rising cargo demand.
Cambodia formally acceded to the Association of Southeast Asian Nations (Asean) in April 1999 and to the World Trade Organisation (WTO) in October this year. Despite this return to the international community, the country’s per capita GDP remains low, at US$314 in 2003, compared with the Asean average of US$1,278 for the same year. If Cambodia is to sustain stable economic growth in the years to come, it is crucial to promote private investment activities by improving its investment climate, including infrastructure development.
The central region of Cambodia, extending between Phnom Penh and Sihanoukville, is the country’s economic centre and home to about half of the population. This region is expected to become the growth corridor that will drive economic expansion, and it is anticipated that more efficient cargo transport in the area will serve to improve Cambodia’s investment climate further.