Supporting small-scale water and electricity operators in Cambodia

The Foreign Trade Bank of Cambodia (FTB) was set up in October 1979 as a department of the National Bank of Cambodia (NBC). Between 1979 and 1999, FTB played an active role in the reconstruction of Cambodia’s economy. In 1999, it was decided to privatize FTB to allow NBC to focus on its role as a central banker and monetary authority and give FTB the opportunity of becoming a fully-fledged commercial bank. In 2000, it started operating as a State-owned bank and in 2005 became a private bank with 90% owned by private shareholders and 10% by the Ministry of Economy and Finance.  

FTB is now one of the ten largest private banks in the country.

In continuation of the first phase of AFD's project to support small-scale water and electricity operators in Cambodia between 2014 and 2019, this new project consists in a USD 20m subsidized senior credit line, with a 70% AFD subparticipation. It is combined with a EUR 1.5m grant to implement the technical assistance program. 

The credit line (USD 18m) to FTB aims to support access to financing for private operators located in rural and periurban areas in Cambodia in the water sector (Small Water Enterprises, SWEs) and electricity sector (Rural Electrification Enterprises, REEs). It will also support the bank’s commitment to finance projects aligned with AFD Group’s climate eligibility criteria for renewable energy and energy efficiency (up to 10% of the amount of the credit line, with a maximum of USD 2m).

The main expected impacts of the project are as follows:

• A knock-on effect on the local economic fabric by allowing SMEs providing essential services to develop their activity and mobilizing an estimated USD 38m of private finance.  
• 8 jobs created and 1,783 jobs maintained at FTB and in the SMES that will be financed over the next 5 years. With 56% of women employees in the bank and a gender policy that goes beyond national regulations, 30% of this financing qualifies under the 2X Challenge initiative to reduce gender inequalities.  
• Some 262,500 people will have access to an improved water service and 281,160 to an improved electricity service.    
• Financing for projects with climate co-benefits for adaptation (60%) and mitigation (24%). A total of 84% of Proparco’s loan will be classified “climate”. 

The project will contribute to SDG 5 (“Gender equality”), SDG 6 (“Clean water and sanitation”), SDG 7 (“Affordable and clean energy”), SDG 10 (“Reduced inequalities”), SDG 11 (“Sustainable cities and communities”) and SDG 13 (“Climate action”).