China Eximbank provides $259.3 million preferential buyer’s credit for Phnom Penh Third Ring Road Project

Project narrative

On July 10, 2018, China Eximbank and the Government of Cambodia signed a $259,397,500 preferential buyer’s credit (PBC) agreement for the Phnom Penh Third Ring Road Project. The PBC carries the following borrowing terms: a 20-year maturity, 7-year grace period, and 2% interest rate. The proceeds of the PBC were to be used by the borrower to finance approximately 85% of the cost of a $305 million commercial (EPC) contract between the Government of Cambodia’s Ministry of Public Works and Transport (MPWT) and Shanghai Construction Group. According to the Government of Cambodia’s ODA Database, China Eximbank made three loan disbursements between 2019 and 2021: a $26,961,950 loan disbursement in 2019, a $51,879,500 loan disbursement in 2020, and a $38,909,625 loan disbursement in 2021. The lender was originally scheduled to make an additional disbursement worth $90,789,125 in 2022. The Phnom Penh Third Ring Road Project is located in the outer urban area of Phnom Penh. The mainline has a total length of 47.6 kilometers. It stretches through Kandal Province for 38 kilometers and Phnom Penh for 15 kilometers. It will form a semicircle that starts at National Road 4 west of the capital and arcs south and east to National Road 21 before crossing the river and heading northwards to connect National Road 1. This road is 47.6 kilometers long, and construction will include 11 bridges and 113 culverts. The road is 27 meters wide in the downtown area and is 25 meters wide in the outskirts of the capital. The main body is a new two-way four-lane road with a design speed of 80 kilometers per hour. As the industrial parks in the suburbs of southwest Phnom Penh are dense and the pressure of logistics and transportation is high, the implementation of the third ring road project will not only promote the economic development of the districts along the route but also promote investment and tourism development in the Cambodian capital area. Shanghai Construction Group is the EPC contractor responsible for project implementation. Guangzhou Wanan Construction Supervision Co., Ltd. is the contractor responsible for project supervision. On January 14, 2019, a groundbreaking ceremony took place. The project was originally expected to reach completion within 42 months (July 14, 2022). As of November 2, 2019, the project had achieved a 40% completion rate. As of May 2021, the project had achieved a 50% completion rate. As of February 25, 2023, the project had achieved a completion rate of almost 90%. The road was officially inaugurated by Prime Minister Hun Sen on August 3rd, 2023.