CDB leads $1.56 billion loan syndicate for Phnom Penh–Sihanoukville Expressway financed through PPP (Linked to Project ID#61788, #66726, and #61784)

In 2007, China Road and Bridge Corporation (CRBC) undertook a feasibility study for the Phnom Penh–Sihanoukville Expressway Project. Almost a decade later, in 2016, CRBC and the Government of Cambodia signed an investment framework agreement for the project. Then, on January 11, 2018, CRBC and the Government of Cambodia signed a concession agreement for the Phnom Penh–Sihanoukville Expressway Construction Project. Under the terms of the concession agreement, CRBC agreed to implement the Phnom Penh–Sihanoukville Expressway Project on a ‘build-operate-transfer’ (BOT) basis and finance the project with a mix of debt, equity and grant financing. The concession agreement specifies a 4-year construction period and a 50-year expressway operation/toll collection period. On January 22, 2019, China’s Ministry of Commerce provided an RMB 600 million ($88,540,000) grant in support of the project (captured via Project ID#61788). Then, on April 22, 2019, China Development Bank (CDB) and China Eximbank (captured via Project ID#61784) and Cambodian PPSHV Expressway Co Ltd. (柬埔寨金港高速公路有限公司) — a special purpose vehicle and wholly owned subsidiary of China Road and Bridge Corporation (CRBC) that was created on May 11, 2018 — signed a $1.56 billion syndicated loan agreement for the Phnom Penh–Sihanoukville Expressway Project. CDB is lead arranger of the syndicate (captured via Project ID#92472), and Sinosure agreed to provide credit insurance. CRBC also agreed to make a $600 million equity contribution (captured via Project ID#66726). The purpose of this project is to construct a 190.6 km (new) expressway that will link Cambodia’s capital, Phnom Penh, to Sihanoukville, site of the nation’s only deep-sea port. More than 90% of Cambodia’s total container traffic passes through Sihanoukville. The Phnom Penh–Sihanoukville Expressway is to be named as Road E4. It will run from Village I, Samrong Krom, Porsenchey, Phnom Penh to Village I, Sangkat III, Sihanoukville. The route will pass through about 8.3 km of Phnom Penh, 9.1 km of Kandal province, 80.8 km of Kampong Speu province, 1.92 km of Koh Kong province, and 89.89 km of Sihanoukville. Built in asphalt concrete with 4 lanes, each in 3.75 meters, the total width of the expressway will be 24.5 meters including the garden in between the opposite lanes. All kinds of vehicles will be able use this expressway at a speed of 100 km to 120 km per hour. The expressway will include 263 pipes, 85 bridges, 6 traffic intersections (linked to National Road 4), another 28 intersections, 20 flyovers, and 237 underground places. Drivers will be able to refill and do stop-overs in between their trips for there will be 4 commercial areas with rest stops, 3 gas stations, and a large parking lot. Other road facilities that will be included are road barriers to ensure the safety of drivers and animals, 4 road maintenance departments, 8 toll gates, and multiple traffic lights and signages. CRBC is the EPC contractor responsible for project implementation. The project officially commenced on March 22, 2019. As of June 2021, the project had achieved a 55% completion rate. As of April 28, 2022, the project had achieved a 90% completion rate. Its originally expected completion date was September 2022. However, the expressway was ultimately opened to the public on October 1, 2022 for a month's trial use for free to attract motorists. Since the beginning of the construction period, the project has reportedly created 6,000 jobs. It is expected to create 10,000 jobs after completion. Since the beginning of construction, this project has already provided around 6,000 direct employments, plus around 10,000 jobs after completion. Once the expressway is in operation, commuters and drivers will be able travel between Phnom Penh and Sihanoukville in 90 minutes, as compared to 5 hours without the expressway. All vehicles will be initially be able use the route free of charge for 1 month. After that, toll gates will actively collect fees (at a 20% discount during the first year). The exact fee for the expressway has yet to be confirmed but is expected to be the lowest among other ASEAN expressway fees. Generally, the price set for Phnom Penh – Sihanoukville expressway will be based on the number of kilometers traveled using different vehicles. Toll rates are expected to vary between USD $0.10 per km and USD $0.13 per km.

Additional details

1. This project is also known as the PP – SHV Expressway Project. The Chinese project title is 金边-西哈努克高速公路 or 金港高速项目 or 金边 - 西哈努克城高速公路 or 柬埔寨金边至西哈努克港高速公路项目. 2. The Shenzhen Urban Planning and Design Institute created a master plan for Shenzhen, China in the early 1990s. In 2019, the Cambodian Government tasked the Shenzhen Urban Planning and Design Institute to reprise that role and design a master plan for Sihanoukville, to transform the port city into the Shenzhen of Cambodia. 3. There may be additional bank participants in the loan syndicate. This issue warrants further investigation. Revisit this source (https://ijglobal.com/data/transaction/40586/phnom-penh-sihanoukville-expressway-190km-ppp). 4. Hunton & Williams and DFDL served as legal advisers to CRBC and helped it achieved commercial close on the 50-year concession. 5. The project achieved financial closure on July 31, 2019. 6. The purpose of the RMB 600 million grant, according to the Government of Cambodia’s ODA database, is ‘[t]o work on the construction of crosswalks or tunnels, service areas, traffic safety equipment, and engineering plans. It will increase logistics efficiency in the country and help reduce road accident.’ 7. Some sources identify the total project cost as $2.019 billion. This issue warrants further investigation. 8. Cambodian PPSHV Expressway Co Ltd. was legally incorporated in May 2018. 9. The exact size of China Eximbank and CDB’s respective financial contributions to the $1.56 billion syndicated bridge loan are unknown. For the time being, AidData assumes that the 2 members of the lending syndicate contributed equal amounts ($780,000,000).

Number of official sources

14

Number of total sources

45