Japan pens loan agreement for port expansion in Cambodia

home 14 Aug 2017
Japan pens loan agreement for port expansion in Cambodia

On August 7, the Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of the Kingdom of Cambodia in Tokyo to provide a Japanese ODA loan of up to 23.502 billion yen for the Sihanoukville Port New Container Terminal Development Project.

The project will develop a new container terminal and improve the cargo handling capacity at Sihanoukville Port with the objectives of improving the logistics environment in Cambodia and promoting trade. The loan funds will be allocated to container terminal and access road development, public works relating to marine routes and mooring basin dredging [1], the procurement of cargo-handling equipment, and consulting services.

The only deep-sea port in Cambodia, Sihanoukville Port is a key logistics hub that supports the national economy. Moreover, due to its strategic location on the Southern Economic Corridor [2], which has been a focus of support from Japan, Sihanoukville Port is expected to become a logistics transfer hub for ASEAN overall. However, the demand for container cargo is rising rapidly due to robust economic growth and the development of manufacturing in Cambodia, and the demand is expected to surpass the cargo handling capacity of the port in the near future.

The project will increase the container cargo handling capacity at the port by approximately 450,000 TEUs [3] to more than one and a half times the current capacity. The project will enable the port to accommodate the larger sized vessels that have become mainstream in the international marine transportation market, which is expected to lead to a reduction in transportation costs.

Japan has been financing improvements to the port since 1999, and in June this year JICA bought a 13.5% equity stake in the Port Authority of Sihanoukville (PAS) when it listed for the first time on the Cambodia Securities Exchange.

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