Japan extends $189M emergency loan to Cambodia

Japan extends $189M emergency loan to Cambodia

The funding support will help the government stabilise energy supplies, accelerate the energy transition, strengthen supply chains and counter economic pressures from high global commodity prices.

The government and the Japan International Cooperation Agency (JICA) have signed a $189 million emergency loan agreement to support the Kingdom’s energy management and address supply chain disruptions amid rising global costs.

The agreement was signed between the Deputy Prime Minister and Minister of Economy and Finance Aun Pornmoniroth and the newly appointed Chief Representative of the JICA Cambodia Office Iwama Nozomi, following a courtesy meeting in Phnom Penh on Wednesday.

According to a joint press release issued on Friday, the financing amounts to 30 billion Japanese yen, equivalent to approximately $189 million, under the programme titled “Emergency Support for Enhancing Economic Resilience and Stable Energy Supply.”

The programme is aimed at strengthening supply chain resilience and mitigating socio-economic impacts through government intervention measures designed to stabilise the economy and maintain livelihoods amid rising energy and raw material prices and supply chain disruptions caused by the situation in the Middle East and other factors.

The loan will provide budget support to help the government manage energy supplies, promote energy transition and conversion, strengthen supply chain resilience and address economic pressures arising from higher global energy and raw material prices.

The initiative is also expected to support Cambodia’s efforts to maintain socioeconomic stability and sustainable development through the implementation of the Comprehensive Intervention Programme, complementing existing government measures and assistance from development partners.

The financing further underscored longstanding development cooperation between Cambodia and Japan, particularly through Official Development Assistance (ODA) and concessional loan schemes that support the Kingdom’s development priorities.

Japan remains one of Cambodia’s key development partners, with bilateral relations further strengthened in 2023 when the two countries elevated their ties from a Strategic Partnership to a Comprehensive Strategic Partnership.

The upgraded relationship has opened opportunities to expand bilateral cooperation, strengthen development assistance and undertake new priority projects across key sectors, in line with the policies, strategic priorities and long-term development goals of the government.

During the meeting, Pornmoniroth expressed his appreciation to the government and people of Japan, as well as relevant Japanese institutions, particularly JICA, for their continued cooperation and contributions to Cambodia’s socio-economic development through ODA.

The Japanese government, through JICA, also reaffirmed its commitment to maintaining a long-term strategic partnership with Cambodia and supporting the country’s development priorities through continued cooperation.

The loan agreement followed the signing of an exchange of notes on Tuesday between newly appointed Japanese Ambassador to Cambodia Ishizuki Hideo and Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation Prak Sokhonn.

According to an announcement by the Embassy of Japan in Cambodia, the emergency support loan forms part of Japan’s continued assistance to the Kingdom in addressing challenges affecting energy security and supply chain stability.

The financing comes as Cambodia faces external economic pressures, particularly rising energy costs that have pushed up agricultural production expenses, fertiliser prices and transportation costs, while also affecting energy supplies and the availability of raw materials.

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