Cambodia : Rapid Intervention for Stabilization of the Economy (RISE) Program under the Energy, Food Security, and Economic Resilience Facility

OBJECTIVE

To help Cambodia mitigate the adverse economic and social impacts of the Middle East situation.

DESCRIPTION

The Program is proposed as a Policy-based Cofinancing (PBCF) operation under the Energy, Food Security, and Economic Resilience Facility (the Facility) with the Asian Development Bank (ADB). It will help Cambodia address the urgent macroeconomic and social impacts of the Middle East situation through timely, temporary and targeted forms of fiscal support to protect vulnerable households, sustain livelihoods, and support economic activity. The structural policy reforms being developed under the Comprehensive Intervention Package (CIP) will build resilience of the economy against similar future shocks.

Cambodia has been adversely affected by the current situation in the Middle East through higher energy prices, rising food and agricultural input costs, and tighter global financial conditions. Higher fuel prices have increased transportation and production costs across the economy and contributed to rising inflation. The shock has also increased fertilizer and other agricultural input costs, putting pressure on agricultural production and rural livelihoods.

To mitigate the macroeconomic and social impacts of the supply shocks, safeguard broader economic recovery, to protect vulnerable groups and to reduce future vulnerabilities to similar shocks, the Government of the Kingdom of Cambodia (GoC) has adopted a comprehensive crisis response action plan – the CIP for 2026-2028. The proposed measures, explicitly planned to be temporary, include efforts to: (i) partially and temporarily insulate the economy from fuel price shocks; (ii) provide targeted financial support to most vulnerable households, and (iii) accelerate the Green Transition.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization. AIIB will co-finance this PBCF with ADB as the Lead Co-financier, ADB’s Environmental and Social Framework (ESF) 2024 will apply to the Program, in lieu of AIIB’s ESP. The Program’s environmental and social (ES) risks and impacts have been assessed in accordance with ADB’s ESF. ADB classifies the Program risk as low. Risk classification is not applicable to Policy-based Financing within AIIB. AIIB has relied on, and agreed with, the ES analytical work and due diligence undertaken by ADB. Project team confirmed that the Program does not support activities included in the Environmental and Social Exclusion List (ESEL). 

Environmental and Social Aspects. The Program does not finance civil works, physical infrastructure, land acquisition, involuntary resettlement, fossil fuel infrastructure, expanded fossil fuel production, or site-specific activities. Therefore, no significant adverse ES impacts, including impacts on Indigenous Peoples or vulnerable groups, are expected. In addition, vulnerable groups, including vulnerable women and Indigenous Peoples, will directly benefit from specific measures under the Program, such as social protection measures to support poor and vulnerable people and agricultural subsidies for training, agricultural production, and diversification. 

Program Grievance Redress Mechanism (GRM). Individuals and communities who believe that they are adversely affected by the Program may submit complaints to the responsible government authorities and the appropriate local/national grievance mechanisms. The information about the availability of these mechanisms to be used and the ADB’s Independent Accountability Mechanism (IAM) will be disclosed timely in an appropriate manner. 

Monitoring and Reporting Arrangement. The Ministry of Economy and Finance (MEF) is the Executing Agency and the overseer of the key implementing agencies and units. Program implementation will be monitored through quarterly reporting coordinated by MEF, including reporting on beneficiary households with available information disaggregated by sex, disability status, and geographic location. Compliance with applicable exclusions will also be confirmed through these monitoring arrangements. ADB will keep AIIB informed of Program implementation in accordance with the MoU between AIIB and ADB. For internal reporting purposes, AIIB will reflect results and attribution through a timely project implementation and monitoring report or PIMR, and at the Program’s closure.