As much as $16 billion of investment is needed in Cambodia over the next decade if the country’s infrastructure is to keep up with the pace of economic growth, according to a regional think tank.
At a seminar in Phnom Penh on Thuesday, Jakarta-based Economic Research Institute for Asean and East Asia (ERIA) presented research showing that between 1990 and 2011, 30 public-private partnerships—including power plants, hydropower dams, airport concessions and a rail rehabilitation plan—were approved in Cambodia, with a large increase after 2006.
However, even though energy projects accounted for 70 percent of the approvals’ total value, the research pointed out that Cambodia still lagged its neighbors in providing electricity, with only 24 percent of Cambodians having access to the national power grid.
A report presented by Nik Nasir Majidan, an independent consultant for ERIA, said that from 2013 to 2022, Cambodia would need between $12 billion and $16 billion in infrastructure investment to keep up with growth in the economy. To do this, the report said the government needed to spend more on making public-private partnerships.
But the report also noted the government was limited by its “fiscal space” and that its revenue was currently only 13 percent of gross domestic product, which was low by regional standards.
For now, only power projects, mostly hydropower dams, get government help in the form of financial guarantees.
Commerce Minister Cham Prasidh, opening the seminar, agreed infrastructure development was lagging economic growth, which according to government figures was 7.3 percent last year.
“Despite the Royal Government of Cambodia’s efforts to build infrastructure, the country’s fast economic growth needs more infrastructure,” Mr. Prasidh said.
“We also acknowledge that there still is some shortage of capacity in resources to accelerate infrastructure development, thus the private sector participation is crucial.”
