News and Events

ADB and Cambodian Government Sign $69.3 Million in Loans and Grants

PHNOM PENH, CAMBODIA (4 February 2005) - The Asian Development Bank and Government of Cambodia signed agreements yesterday for three loans and three grants totaling $69.317 million to assist the country's education, small and medium enterprise (SME), health, and public financial management sectors.

Signing on behalf of the Government, at the Ministry of Economy and Finance, were the Economy and Finance Secretary of State, H.E. Aun Porn Moniroth, and on behalf of their ministries, the Education, Youth and Sport Senior Minister, H.E. Kol Pheng and Minister of Health H.E. Nuth Sokhom. ADB's Country Director for Cambodia, Shyam P. Bajpai, signed on behalf of ADB. Japan's ambassador to Cambodia, H.E. Fumiaki Takahashi, witnessed the signing.

The six loans and TAs comprise the following:

The Second Education Sector Development Program (ESDP-II), which is designed to help the Government further its education reforms that started four years ago with support from ADB under a first program. [ PDF ] The program comprises a $20 million program loan and a $25 million project loan.

The program loan [ PDF ] will address access to education and training, boost standards and efficiency in the sector, promote decentralization, and increase mobilization of resources and their allocation.

The project loan will help build 400 lower secondary schools in selected underserved and demand communes and provide furniture, equipment, and instructional materials.

It will also begin the first phase of a community-based skills training program for out-of-school youth and the unemployed and underemployed in the poorest 40% of the communes in seven provinces, with priority given to the 15-21 age group. The Ministry of Education, Youth and Sport (MoEYS) and the Ministry of Labor and Vocational Training (MLVT) are the executing agencies of these two loans. The Government will contribute $8.6 million equivalent toward the project's cost.

A Small and Medium Enterprise Development Program (SMEDP) [ PDF ] will support Government efforts to establish an SME development framework that promotes better policy coordination among key Government agencies and more public-private partnerships, carry out regulatory reforms, and enhance SMEs' access to finance. It will address shortcomings in the business registration process by enhancing transparency and reducing costs through the elimination of unnecessary requirements. The business licensing system will be reformed and streamlined by establishing a one-stop information window to provide guidelines and information for SMEs.

It will also develop a credit information sharing system to help reduce the risks faced by banks in lending to SMEs, develop guidelines and handbooks for the SMEs to better use the current accounting system, tailor the current tax filing system to the needs of SMEs, and develop a framework for leasing as a potential source of longer term financing. The Ministry of Industry, Mines and Energy (MIME) will be the executing agency of this $20 million program loan.

A TA for health care financing for the poor [ PDF ] is part of the larger ADB-financed Health Sector Support Project (HSSP), which aims to support the establishment of an equity fund that will reduce the vulnerability of the poor to catastrophic health shocks through financial support in the form of demand-side subsidies for the catastrophic health expenses of the poor and vulnerable population.

The total cost of the TA is $2,517,000, of which $1.847 million will be a grant from ADB-managed Japan Fund for Poverty Reduction (JFPR), financed by the Government of Japan.

A TA to improve primary school access in disadvantaged communes [ PDF ] aims to reduce poverty in the poorest districts and communes in Cambodia by ensuring access to primary education (Grade 1-6), especially for girls from the poorest families and children (including ethnic minorities) living in remote areas.

It will expand the capacity of 340 primary schools (out of total 2,500 incomplete schools in six of the poorest provinces) to provide full range, of primary education; introduce a community-led school development grant process; and strengthen school development planning and management as a joint process by school, parents, and communities.

The overall cost of the TA is $2,870,000, of which $1.87 million will be a grant from ADB-managed JFPR. The Cambodian government, community and aid agency and NGOs cover the remaining cost of the TA.

A TA for support to public financial management (PFM) reform program [ PDF ] aims to assist the Government in ensuring that the budget is comprehensive and policy-based. The goal represents one of four performance measures related to the overall objective of stage 1 and platform 1 of the Consolidated Action Plan, to improve the credibility of the budget.

The total cost of the TA is $706,000, of which $ 600,000 is financed by ADB and $106,000 by the Government.

The Asian Development Bank (ADB) is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 63 members - 45 from the region.

Contact Person: Mr. Leak Ratna, External Relations Consultant
Tel: + 855 23 215 805, 215 806, 216 417
Fax: + 855 23 215 807
Email: lratna@adb.org