AFD in Cambodia

© AFD - E. Beugnot

► About Cambodia [+]

© AFD - C. Benveniste

Cambodia, in the heart of South-East Asia, has a population of 14.3 million. After years of war under the Khmer Rouge regime and Vietnamese occupation, peace gradually returned to the country after the Paris Accords were signed in 1991. Severely weakened by these difficult years, the economy has recovered and opened up to  international markets when Cambodia joined ASEAN (Association of South-East Asian Nations) in 1999 and the World Trade Organisation in 2004.

Today, agriculture, textile manufacturing and tourism are the mainstays of Cambodia’s economy. Economic growth was estimated at 6.5% in 2012 by the International Monetary Fund and is expected to stabilise at around 7% in the next few years. Although Cambodia’s economic development has been remarkable, it has not benefited the majority of the population. GDP per capita was still less than 820 USD in 2011. Furthermore, lack of diversification still makes the country’s economy vulnerable to market shocks and competition from neighbouring countries.

After its reconstruction phase, Cambodia now has to determine and consolidate its position in a rapidly changing region with potentially large-scale market opportunities (ASEAN, China). Cambodia’s natural resources, cultural and architectural heritage and youthful population are undeniable assets for dynamic development. This is the context of AFD intervention to support Cambodia in its efforts towards sustainable and
equitable development.

► AFD's strategy in Cambodia [+]

© AFD - E. Beugnot

Agence Française de Développement (AFD) was authorised to begin activities in Cambodia in 1993. Its Phnom Penh agency opened in September of that year.

Historically, AFD has focused on grant support to agriculture and to the urban development and health sectors. Since July 2009, the AFD’s means of action in Cambodia have evolved significantly. To support Cambodia’s growth, the AFD, in consultation with Cambodia’s 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.

In July 2012, Cambodia became eligible for sovereign loans from the AFD, when the IMF raised its debt sustainability ranking.

Today, the main target sectors for AFD intervention are:

  • agriculture and agro-industry;
  • infrastructure;
  • the productive sector;
  • vocational training (for textile manufacturing and tourism, and potentially for agriculture).

Since 1993, the AFD group (AFD and PROPARCO) has awarded more than 270 M€ in total project funding to  Cambodia, including to 70 projects in 2012.

► Forms of AFD intervention [+]

The AFD Group in Cambodia is in a position to call on a wide range of supporting financial products:

  • concessionary sovereign loans to the State;
  • non-sovereign loans to public or private enterprises, concessional or not and without State guarantees;
  • loan guarantees (in particular through the ARIZ scheme for individual guarantees or portfolio guarantees in partnership with local commercial banks);
  • equity or quasi-equity investments;
  • grant financing for development or technical assistance programmes, including grants from the FGEF (French Global Environment Facility) or the PRCC (business capacitybuilding programme) and for NGOs;
  • training and capacity building for businesses through the AFD enterprise university, CEFEB (centre for financial, economic and banking studies) based in Marseille: diploma courses, short seminars or seminars on request;
  • preparatory studies prior to project examination and strategy studies by sector.

AFD also provides grant funding for regional activities (15.1 M€ in the last few years): these include projects to control emerging diseases with the Pasteur Institute network, implementation of a regional scheme to promote geographical indications and several activities to support the Mekong River Commission (MRC).

More information on forms of AFD intervention

Last update in July 2013

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