Deal to Deliver Cambodia’s New Logistics Complex, Promote Regional Connectivity and Integration

Photo: Senior Minister Sun Chanthol, Ministry of Public Works and Transport (left) and Asad Yaqub, IFC Resident Representative signed the Financial Advisory Service Agreement for the Sihanoukville Logistics Complex in Phnom Penh, Cambodia, April 19, 2023

Phnom Penh, Cambodia, April 19, 2023—To help Cambodia deliver on its aim—to become a new regional logistics hub in Southeast Asia, IFC has signed a new deal with the Ministry of Public Works and Transport to set up a public-private partnership (PPP) for a logistics complex in Sihanoukville province.

The new agreement will see IFC—as the exclusive lead advisor— structure the PPP transaction and support the government to conduct an international competitive tender to select a qualified private developer in accordance with the country's PPP law. The project is expected to be developed in phases, with an overall capital cost estimate of about $200 million.

"The Sihanoukville Logistics Complex is one of the two priority logistics hubs to be developed in Cambodia. Our objective is to position Cambodia as a regional logistics transfer hub in Southeast Asia," said Senior Minister Sun Chanthol, Ministry of Public Works and Transport. "By working with IFC, we can leverage their global expertise as we explore best options to leverage private sector engagement in the development of this critical logistics infrastructure in the country."

With its strategic location in Cambodia's coastal southwest and well connected to roads, railways, and an airport, the complex can supplement the Sihanoukville port, which is Cambodia's only international and commercial deep-sea port, handling two-thirds of the total container throughput in the country. A modern and transport-integrated logistics complex supporting the port will help accelerate movement of exports and imports and reduce port congestion. The project will improve efficiency and lower logistics costs in Cambodia, which are now among the highest in East Asia and one of the key bottlenecks to competitiveness and diversification.

The developer is expected to finance, develop, and operate the infrastructure, facilities, and systems within the complex under a long-term PPP contract with the government. The tender award to the winning bidder is likely to be granted by late 2024, with the hub to be constructed over three years.

"Large-scale investments in infrastructure are vital to support Cambodia's export-oriented manufacturing industries and boost the country's supply chain and logistics connectivity with the region," said Asad Yaqub, IFC Resident Representative for Cambodia. "With IFC's support, this is a project which will be structured in line with global best practices to create a competitive market and draw qualified investors. Bringing in private sector financing will help reduce the burden on the country's finances and also set a precedent for developing transport and logistics PPP transactions in the country."

For over 20 years, IFC has been a trusted advisor to governments on structuring PPP transactions, working on over 350 projects in 99 countries, including many of the world's poorest, helping facilitate about $45 billion in private investment. In ports, IFC's focus is to assist governments in designing a partnership that will maximize port efficiency in integration with inland transport networks, taking into account the country's broader social and economic needs.

About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.

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