IFC to Help Cambodia Become Southeast Asian Logistics Hub

Cambodia and International Finance Corp link up to enable the latter structure a private-public partnership transaction and conduct an international tender to pick a developer to build a $200 million logistics complex in Sihanoukville, in its bid to become a regional logistics hub
IFC said a modern and transport-integrated logistics complex supporting the port will help accelerate movement of exports and imports and reduce port congestion. Kiripost via MPWT
IFC said a modern and transport-integrated logistics complex supporting the port will help accelerate movement of exports and imports and reduce port congestion. Kiripost via MPWT

The Ministry of Public Works and Transport and World Bank’s International Finance Corp (IFC) have signed a deal to establish a public-private partnership (PPP) that will enable Cambodia to become the latest regional logistics hub in Southeast Asia, at an estimated capital cost of $200 million.

As the exclusive lead advisor, IFC would structure the PPP transaction and support the government to conduct an international competitive tender to select a qualified private developer in accordance with the newly enacted PPP law to build the complex in phases.

According to a statement by IFC today, 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,” it noted.

Minister Sun Chanthol said 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. By working with IFC, we can leverage their global expertise as we explore the best options to leverage private sector engagement in the development of this critical logistics infrastructure in the country,” he added.

Given Sihanoukville’s strategic location in Cambodia’s coastal southwest and connection to roads, railways, and an airport, the logistics complex can supplement the Sihanoukville Autonomous Port, IFC stated.

The port is Cambodia's only international and commercial deep-sea port, handling two-thirds of the total container throughput in the country.

IFC said a modern and transport-integrated logistics complex supporting the port will help accelerate movement of exports and imports and reduce port congestion.

IFC has been a trusted advisor to governments on structuring PPP transactions for more than 20 years, working in more than 350 projects across 99 countries, including many of the world’s poorest, helping facilitate about $45 billion in private investment.

In ports, its focus is to assist governments in designing a partnership that will maximise port efficiency in integration with inland transport networks, taking into account the country’s broader social and economic needs.

Last year, 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.

sangeetha.amarthalingam@kiripost.com