Narrative
Full Description
Project narrative
On October 17, 2023, China Eximbank and the Government of Cambodia signed a $85,956,000 preferential buyer’s credit (PBC) agreement for Phase 8 of the Rural Grid Extension Project. The borrowing terms of the loan include a 20-year maturity, a 7-year grace period, and a 2% interest rate. The borrower is expected to use the proceeds of the loan to finance 95% of the cost of a $90,480,000 commercial contract with China National Heavy Machinery Corporation (CHMC). The purpose of the project is to build 3,085 kilometers of 22 kV and 35 kV medium-voltage lines and install 635 pole-mounted transformer switchgear in Takeo, Pursat, Kampong Cham, Tbong Khmum, Otdar Meanchey, Kampong Thom, Battambang, Koh Kong, Banteay Meanchey, Siem Reap, Pailin, Preah Vihear, Kampong Speu, Kampong Chhnang, Prey Veng, Stung Treng, Mondul Kiri, Ratanakiri, Kratie, Svay Rieng, Preah Sihanouk. Upon completion, the project is expected to improve rural power conditions in Cambodia, increase power supply coverage and quality, reduce electricity prices in the areas involved in the project, narrow the gap between rural and urban power grid development levels, improve regional living standards, increase the number of jobs, and drive economic development in the region. CHMC is the EPC contractor responsible for project implementation. The project’s originally scheduled commencement and completion dates were January 1, 2023 and December 31, 2026, respectively.
Staff comments
1. This project is also known as the Rural Electrification Project Phase 8 Project and the Cambodian Rural Power Grid Expansion (Phase 8) Project. The Chinese project title is 柬埔寨农村电网扩建八期项目. 2. The signing of the PBC agreement took place during the third ‘One Belt, One Road’ International Cooperation Summit Forum. It was witnessed by Premier Li Qiang of the State Council and Prime Minister of Cambodia Hun Manai, Chairman of the Export-Import Bank Wu Fulin and Cambodian State Secretary of Economy and Finance Rosiva. 3. The borrowing terms of the PBC are identified here: https://www.dropbox.com/scl/fi/abzk8v0q7rt6kl3hxmzz5/ODA-Cambodia-May-2025-Record-for-Phase-8-of-Rural-Grid-Extension-Project.pdf?rlkey=kokdm1sr5hbm47tz7p70wstij&dl=0 4. The PBC that supported Phase 7 of the Rural Grid Extension Project is captured via Record ID#92545.