France Makes $15 Million Loan for Clean Water and

• 31 December 2015
• Local News
• 1100 Views

The French development agency AFD loaned Cambodia US$15 million in late April to promote clean water and boost rural electrification in the Kingdom.

The loan agreements were signed on April 28 by Finance Minister Aun Ponmonyroth and Chargé d’affaires a.i. of the French Embassy in Cambodia, Alain Fortin, and André Pouillés-Duplaix, AFD director for Cambodia and Laos.

According to an AFD press release, the concessional loan was released to the Foreign Trade Bank (FTB), from where money will then be disbursed to local water and electricity suppliers who request support from the fund.

The concessional loan complements financial assistance from the European Union in the form of a US$4.2 million grant from the Asian Investment Facility Fund. Operated by AFD, it improves the technical capacity and financing of private water and electricity operators.

Moreover, AFD has signed a settlement guarantee with the FTD for around US$5 million.

This new assistance marks the ongoing efforts of AFD to help develop clean water and rural power supplies in Cambodia. It will give 50,000 families better access to clean water and another 35,000 families new access to power.

AFD is the main implementing agency for France’s official development assistance to developing countries and its overseas territories. It was authorized to begin activities in Cambodia in 1993. Its Phnom Penh agency opened in September that year.

Historically, AFD has focused on grant support to agriculture, urban development and health projects. Since July 2009, AFD’s activities in Cambodia have evolved significantly. To support Cambodia’s growth, the AFD, in consultation with Cambodian authorities, has directed its support to productive sectors via non-sovereign loans, i.e. direct loans to public and private companies or banks without guarantees from the Royal Government of Cambodia.

Today, among the AFD’s main target sectors are: agriculture and the agricultural industry; infrastructure; and vocational training (for textile manufacturing and tourism, and potentially for agriculture).

Since 1993, the AFD Group (AFD and the development finance institution Proparco) has awarded more than US$372 million to Cambodia, including to 70 projects in 2012. In July 2012, Cambodia became eligible for sovereign loans from AFD, when the IMF raised its debt sustainability rating.