On August 7, the Japan International Cooperation Agency (JICA) signed a loan agreement with the government of Cambodia in Tokyo to provide a loan of up to 23.502 billion yen (about $216m) to expand Sihanoukville Port.
The project will nearly double handling capacity at Cambodia’s only deepwater port with a new container terminal and improved cargo handling to boost trade.
The loan, which has a 40-year term with an annual interest charged at just 0.01%, will pay for the new container terminal, access roadwork, dredging, cargo-handling equipment and consulting services.
Following decades of internal and regional conflict, including the murderous regime of Pol Pot’s Khmer Rouge, Cambodia stabilised in 1993 and is now experiencing rapid economic growth led by garment manufacturing. After a visit to the country of around 16 million last month the International Monetary Fund projected growth to stay robust at around 7% in 2017-18.
The economy relies on Sihanoukville Port. Moreover, JICA believes it will become a logistics hub southeast Asia overall due to its strategic location on an international trunk road connecting Ho Chi Minh City (Vietnam), Phnom Penh (Cambodia), and Bangkok (Thailand).
JICA says demand for container cargo is rising fast and is expected to surpass handling capacity soon.
This project will increase handling capacity by one and a half times, by approximately 450,000 TEUs (twenty-foot equivalent units), and allow it to accommodate bigger vessels.
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.
Image: Sihanoukvile Port (http://www.pas.gov.kh)