Usd7bn Investment Set for Cambodia

• Proeksa Meas
• 15 January 2018
• Uncategorized
• 1791 Views

Two giant Chinese property and construction players made a solemn pledge to invest USD7bn in Cambodia during Prime Minister Hun Sen’s visit to Beijing in late November.

The announcement came following a working discussion between Cambodian Prime Minister Hun Sen, Mr. Zhang Yuling, Chairman of Greenland Holding Group, and Mr. Cheng Risheng, Chairman of Henan Transport Investment Group.

The two firms reportedly informed their Cambodian visitors of the purpose of their investments which include four major project developments. The new projects would include an expressway from the capital, Phnom Penh, to the coastal port city of Sihanoukville. Also on the table is the construction of another satellite city near Phnom Penh, tourism and recreational facilities and a large-scale commercial bank.

High profile executives of the two developers explained their investments to Prime Minister Hun Sen who intends to improve Cambodia development as part of Chinese President Xi Jinping’s One Belt One Road initiative.

A statement released by the government said Prime Minister Hun Sen welcomed the decision, which would be followed by a series of formal agreements to pave the way for the investments when China’s Prime Minister, Li Keqiung visits Cambodia in January 2018.

According to the statement, the two Chinese executives told the Cambodian prime minister that they would work with the relevant Chinese ministries to prepare the documentation to solidify the pledge before the Prime Minister of China visits Cambodia early next year.

The investment projects, which are expected to create 20,000 jobs when construction commences, were warmly welcomed by Prime Minister Hun Sen, who reportedly told his Chinese counterpart that Cambodia gives special preference to foreign developers able to use 100 percent of their own capital investment without partnering with local sub-contractors.

Founded in 1992 with its headquarters in Shanghai, the Greenland Group has expanded its overseas business in high gear, covering 4 continents, 9 countries and 13 cities including USA, Canada, UK and Australia, and become a leading global operator in China’s real estate industry, according to its website.

The group has already invested USD500m in an emerging satellite city on Diamond Island and its projects are expected to finish by 2018.

In 2016, the Cambodian Ministry of Land Management, Urban Planning and Construction reported that Chinese firms top the list of foreign direct investment (FDI), followed by Korea and Japan, with 20 projects under development and a capital investment worth approximately USD841 million.

The International Monetary Fund (IMF) predicted in late October that Cambodia’s economy will grow by 6.9 percent this year, slightly down from 7 percent last year.

The Cambodia construction sector alone received a total investment of USD4.94bn during the first six months of 2017, up 27 percent over the same period last year. According to the IMF, the construction and real estate sectors remained strong, supported by demand for housing from Cambodia’s young and growing middle-income population.