ADB, Korea Support Cambodia to Improve Cross-Border Road Links

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and the Republic of Korea are supporting road and border improvements in Cambodia to help reduce poverty, increase economic opportunities, and boost ongoing efforts to strengthen trade and tourism in the Greater Mekong Subregion (GMS).

ADB’s Board of Directors approved a loan equivalent to $16.3 million for the project which will rehabilitate 113 kilometers of a national road in the northwest of the country, and upgrade a cross-border facility with Thailand. The Ministry of Strategy and Finance of Korea is extending a loan equivalent to $25.6 million through its Economic Development and Cooperation Fund (EDCF).

The pot-holed gravel road, that is impassable in the wet season due to flooding, cuts through two of the poorest provinces in the country- Banteay Meanchey and Oddar Meanchey. It links up with another major route which is a key conduit for goods and people between northwest Cambodia and northeast Thailand, and also forms a feeder connection to the GMS east-west corridor.

Roads are the lifeblood of transport in the GMS but poor surfaces raise costs, cause lost economic opportunities and contribute to high accident rates. The upgraded road and border facility will reduce travel times, improve traffic safety, increase access to markets, and provide new job and business opportunities. It will be another step to strengthen connectivity and develop economic corridors across the GMS- a bloc of six nations committed to closer ties that support sustainable growth, boost employment and reduce poverty.

“The project will support the GMS strategy by improving connectivity between Thailand and Cambodia, thereby enhancing subregional transport and trade,” said Shihiru Date, transport specialist in ADB's Southeast Asia Department.

The improved facilities are expected to aid cross-border tourism as the restored road connects to a key east-west route to Siem Reap – site of the world famous Angkor Wat temple. Opportunities for contract farmers, who cultivate high-value fruit for export to neighboring countries should also expand, while the all-weather surface will improve access to health and education facilities. The project will include an HIV prevention and anti-human trafficking program, as new cross-border roads represent a potential threat for the spread of communicable diseases, and the trafficking of women and children.

ADB’s loan, from its concessional Asian Development Fund, comprises 34% of the total project cost. It has a 32-year term with an 8-year grace period carrying a 1% interest charge, and 1.5% for the balance. The Government of Cambodia will contribute counterpart funds of $6 million, while the Ministry of Public Works and Transport will be the executing agency. The estimated completion date for the project is December 2013.