Cambodia : Agricultural Value Chain Infrastructure Improvement Project

Project Name

Agricultural Value Chain Infrastructure Improvement Project

Project Number

50264-001

Country / Economy

• Cambodia

Project Status

Active

Project Type / Modality of Assistance

• Technical Assistance

Source of Funding / Amount

TA 9545-CAM: Agricultural Value Chain Infrastructure Improvement Project

Source	Amount
Project Readiness Improvement Trust Fund	US$ 500,000.00
Japan Fund for Prosperous and Resilient Asia and the Pacific	US$ 1.50 million

TA 9545-CAM: Agricultural Value Chain Infrastructure Improvement Project

Source	Amount
Cooperation Fund for Project Preparation in the Greater Mekong Subregion and in Other Specific Asian Countries	US$ 100,000.00

TA 9545-CAM: Agricultural Value Chain Infrastructure Improvement Project

Source	Amount
Cooperation Fund for Project Preparation in the Greater Mekong Subregion and in Other Specific Asian Countries	US$ 200,000.00

Strategic Agendas

• Inclusive economic growth

Drivers of Change

• Gender Equity and Mainstreaming
• Governance and capacity development
• Knowledge solutions
• Partnerships
• Private sector development

Sector / Subsector

• Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agro-industry, marketing, and trade - Rural market infrastructure

• Information and communication technology / ICT strategy and policy, and capacity development

• Transport / Road transport (non-urban)

Gender

Effective gender mainstreaming

Description

Cambodia's agriculture sector is characterized as low value added, low productive, and natural resource exhaustive. They are caused by: (i) poor and climate-vulnerable agricultural production and service infrastructure; (ii) underdeveloped agricultural value chains; and (iii) unsustainable natural resources management exacerbated by climate change. The Agricultural Value Chain (AVC) Infrastructure Improvement Project (the project) aims to tackle the core sector problem of low productivity, low value addition, and low resource efficiency of Cambodia's agriculture with the following outputs: (i) post-harvest and logistic facilities strengthened; (ii) agricultural production and service infrastructure improved; (iii) rural connectivity and disaster risk management capacity improved; and (iv) business partnership among value chain stakeholders enhanced (see detailed description of the outputs in the concept paper). These outputs will result in the following outcome: value addition to selected agricultural products in the project area increased. The project will be aligned with the following impact: value addition in agriculture sector enhanced.

Project Rationale and Linkage to Country/Regional Strategy

Agriculture remains a crucial sector for the Cambodian economy. The sector alone, including processing, transportation, and trade of agriculture products, accounts for 33.7% of the

gross domestic product (GDP). The agriculture sector GDP grew by 4.5% per annum during 2008-2012, mainly driven by the cultivated land expansion and high prices of agricultural

products. The sector growth, however, slowed down during 2013-2016 (0.9% per annum) because of the loss of those drivers, and extreme weather events. Agricultural products are

Cambodia's second largest export products, after the textile and garment, constituting $533 million (5.2% of total export) in 2016; nonetheless, those agriculture exports are largely in raw form and their value addition occurs in other countries. To capture this forgone economic opportunity and diversify the economy, it is important to strengthen the value chains of agricultural products.

The transaction technical assistance (TRTA) is required to (i) assist in the design the project; (ii) conduct financial and integrity due diligence of the potential participating financial institutions; (iii) carry out technical, financial, economic, procurement, social, gender, and environmental due diligence required by ADB and the government; (iv) propose the implementation arrangements; (v) ensure synergies and integration with other related interventions in ADB, Japan International Cooperation Agency and other development partners' country portfolio and project pipelines; and (vi) prepare the project documents according to ADB's requirements. The TRTA will also provide support to incorporate climate change adaptation and mitigation measures in the designs of both public and private value chain infrastructure and facilities and to enhance project readiness.

Impact

Project Outcome

Description of Outcome

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Status of Implementation Progress (Outputs, Activities, and Issues)

Geographical Location

Kampong Cham, Kampong Thom, Otar Meanchey, Preah Vihear, Siem Reap, Tboung Khmum

Summary of Environmental and Social Aspects

Environmental Aspects

Involuntary Resettlement

Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design

The main stakeholders will be smallholder farmers, the entrepreneurs who establish and operate the SMEs engaged in processing and trading of agricultural products within the selected value chains, and district and provincial agricultural extension staff. Participating financial institutions will benefit from the project through increased access to finance and strengthened credit underwriting and monitoring capacity to successfully cater to farmers and agribusiness needs. The consumers of agri-food products will benefit from consistently better quality and safer products. During the TRTA a consultative process will be used to identify the specific value chains to support and a wide cross section of local stakeholders will have the opportunity to contribute their knowledge.

During Project Implementation

During the TRTA there will be consultations with poor and vulnerable households to identify their potential roles in the project design and to ensure the removal of barriers to their participation and benefits from the project and a strategy for capacity strengthening of farmer organizations and/or agricultural cooperatives will be developed.

Business Opportunities

Consulting Services

A consulting firm and resource persons were engaged on an intermittent basis in accordance with ADB Procurement Policy and Procurement Regulations for ADB Borrowers (2017, as amended from time to time) and its associated project administration instructions and staff instructions.

Procurement

Procurement of equipment will be done by the consulting firm to be hired under the TRTA in accordance with the ADB Procurement Policy and Procurement Regulations for ADB Borrowers (2017, as amended from time to time), and its associated project administration instructions and staff instructions.

Contact

Responsible ADB Officer

Song, Hyunyoung

Responsible ADB Department

Sectors Group

Responsible ADB Division

Agriculture, Food, Nature, and Rural Development Sector Office (SG-AFNR)

Executing Agencies

Ministry of Agriculture, Forestry & Fisheries

Timetable

Concept Clearance

-

Fact Finding

-

MRM

-

Approval

29 Jun 2018

Last Review Mission

-

Last PDS Update

30 Sep 2020

Funding

TA 9545-CAM