Beijing, China, December 23, 2020
AIIB Approves First Sovereign Loan to Cambodia To Help Rural Recovery
The Asian Infrastructure Investment Bank (AIIB) has approved its first sovereign-backed financing to Cambodia to support the government’s recovery efforts following the adverse impact of the COVID-19 pandemic on the country’s rural population. Some 480,000 people in five provinces will benefit from the USD60 million loan, primarily aimed at assisting women, children, and jobless returning migrants in rural areas.
While the number of reported COVID-19 cases in Cambodia has been relatively low - 307 cases as of October 2020 - the containment measures have come at a cost to the economy, which is projected to contract by 5.5 percent in 2020. The decline of the manufacturing, construction, and tourism sectors, which account for 43 percent of GDP has had critical social implications as they employ a large number of women and informal workers with overseas migrants returning to their villages and putting additional pressure on the rural economy already under stress.
“Our support to Cambodia is part of the Bank’s concerted effort to broaden our services to our lower-income members,” said AIIB Vice President, Investment Operations, D.J. Pandian. “AIIB is strongly committed to ensuring that the Government of Cambodia has the necessary resources and capacity to protect the most vulnerable in the country.”
The project focuses on local rural economic development, creating employment opportunities, improving the surface of around 235 kilometers of existing roads, and restoring 150 water sanitation and hygiene rural programs to sustain livelihoods, trade flows and food security. Additional components on smart and integrated irrigation systems, proposed under the rural infrastructure program, will be prepared under a second project targeting approval in 2021 as part of the government’s longer-term recovery effort.
The project was approved under a new Special Fund Window (SFW) as part of AIIB’s COVID-19 Crisis Recovery Facility. This additional financing will allow Cambodia to buy down the interest rate to reduce the financial burden of the loan. AIIB’s SFW is only available to International Development Association members to help them raise affordable funds to fight the pandemic.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 103 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Working with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
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