Cambodia

Cambodia’s economy remains fragile, despite record growth. AFD has been operating in Cambodia since 1993, where it supports the country’s development in two priority sectors: infrastructure and industry.
Couple in front of their house, Cambodia
AFD and Cambodia: Supporting the environmental and social aspects of the productive sector
Couple in front of their house, Cambodia

Extending access to water

Tap water

Extending access to water

Cambodia has abundant water resources. However, almost half of urban dwellers did not have access to water in 2010.

Addressing the challenge of urban growth in Phnom Penh

Since 2003, AFD has been working in partnership with Phnom Penh Water Supply Authority (PPWSA). It is financing a number of projects in the sector of access to drinking water. The objective: increase the production capacity, optimize wastewater treatment and extend the distribution network in and around the capital. The result: 85% of the city’s population benefits from a drinking water supply. This is a real achievement in a city which is home to 10% of the country’s population and where the majority of industrial activities are located.

Improving access to water in rural and semi-urban areas

Since 2014, we have also been helping small-scale private operators extend and/or rehabilitate networks in rural and semi-urban areas. This action has a positive impact on economic development in these regions and scales up access to an improved water source.

Developing the rice industry

Cambodia irrigation water agriculture

Developing the rice industry

Rice growing is a priority for Cambodia. Since 1998, AFD has been participating in the definition of the Government’s agriculture and water strategy to support the various actors in the sector and improve their performance on the international market
AFD focuses on two main issues:

  • Increasing production. We finance projects which rehabilitate agricultural areas and improve their irrigation. For example, in Stung Chinit, we have rehabilitated an irrigation network of 2,500 ha, and over 10,700 ha through the Northwest Irrigation Sector Development Project. 

We use an integrated approach, for each watershed, and participatory approach, including water users in network management and maintenance. 

  • Developing national production and improving its export. We are financing a project to support the marketing of Cambodian rice. It fits in with the national strategy to develop exports and aims to maximize incomes for producers and economic actors in the rice industry. 
     

Strengthening microfinance

Corn harvest in Cambodia made possible by microfinance

Strengthening microfinance

In 1991, following painful years of war, Cambodia’s financial system had to be completely rebuilt. In the same year, the UN and main development agencies made it a priority to develop rural credit by financing microenterprises. AFD, in partnership with French and international NGOs, consequently supported the creation of the first village banks

In 2009, aware of the risks of overindebtedness, AFD mobilized EUR 800,000 to strengthen the microfinance sector. This commitment was reaffirmed in 2012 and is still ongoing. Furthermore, AFD implements a range of appropriate tools (such as the ARIZ risk-sharing mechanism) to provide sustainable support to economic actors from microenterprises
 

Improving working conditions in the textile sector

Cambodia Garment manufacturing in a textile factory

Improving working conditions in the textile sector

The challenge lies in improving working conditions for employees, while increasing productivity. Back in 2004, AFD supported the development and sustainability of a socially responsible textile industry via the Better Factories Cambodia program. It works in partnership with the International Labour Organization (ILO), NGOs, and the Garment Manufacturers Association in Cambodia (GMAC). 

For example, it has partnered with GMAC to build and equip a vocational training center for textile activities. Some 8,000 Cambodian workers can now access middle and senior management positions. The improvement in the skills of factory employees increases productivity, which has a positive impact on incomes and offers new professional opportunities to employees in the sector. The vocational training center opened during the summer of 2017. AFD has also financed the Health Insurance Project (HIP), a pilot project which offers employees health insurance. Some 7,000 women workers, working on 10 production sites, have benefited from it. The project has been so conclusive that the Government has made the national health insurance system mandatory for all registered companies with over 8 employees. 

We are studying other means of action in factories, such as the creation of canteens, the installation of libraries and daycare centers and the implementation of literacy programs. All these actions are based on partnerships. 
 

54
projects financed over the past 10 years
300
million euros committed since 2012

The Kingdom of Cambodia, a Southeast Asian country, has some 15.8 million inhabitants, with 80% living in rural areas.

The country has a particularly dynamic growth rate: over the past two decades, it has been around the 8% mark – one of the highest in the world. This dynamism has been combined with a significant reduction in the poverty level, from 45% to 17% between 2004 and 2012. 
Cambodia has opted for a resolutely open economic policy, integrated into the global economy. Yet the fundamentals of growth remain fragile: infrastructure (transport, water, electricity) is not sufficiently developed, the economy is not sufficiently diversified. The country does, however, have potential with high added value: tourism, the textile industry and agribusiness. 

AFD has been a partner of Cambodia since 1993 and supports the country in two structural areas: promoting balanced territorial development and supporting the environmental and social aspects of the productive sector. It has a wide range of tools for this purpose: technical assistance, grants, loans to the State, loans to companies and local authorities, ARIZ guarantees. 
 

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