World Bank Prepares to Lift Freeze on Lending to Cambodia

The World Bank is contemplating a $25-million project to build up 15 social land concessions (SLCs) across Cambodia and could approve the scheme as soon as December, according to a proposal posted to the Bank’s website late last month, a move that would end its now three-year-old freeze on new lending to the country.

In August 2011, the World Bank confirmed that it had quietly decided not to approve any new lend- ing to Cambodia until “an agreement is reached” between the government and 3,000 families that were evicted from their homes in Phnom Penh’s Boeng Kak neighborhood to make way for a high-end development project backed by CPP Senator Lao Meng Khin.

The government says it is the responsibility of the World Bank and NGOs to help the families affected by the Boeng Kak development, while the Bank claims its efforts to do so have been blocked by the government.

But now, it appears the freeze on new funding may thaw by the end of the year. The date for board approval of the new SLC project is tentatively set for December 11, according to the Bank.

SLCs are issued by the government to poor—and often landless —families, typically in groups of a few hundred.

The majority of the $25 million the bank is proposing to lend would go toward building roads, water systems, schools and clin- ics at 15 existing SLCs in Battambang, Kompong Cham, Kompong Chhnang, Kompong Thom, Kompong Speu and Kratie provinces. The money would also finance in-kind and cash support for the roughly 5,400 families who live on the land.

The government would contribute an additional $2 million to the venture.

A World Bank spokesman on Monday declined to comment on the prospect of lifting the Bank’s funding freeze before the Boeng Kak evictees have been properly compensated.

Sea Nareth, 56, one of the thousands of people who were evicted from the Boeng Kak neighborhood, said that since taking the $8,500 she was offered in compensation, she has had to move in with her son, who rents an apartment in central Phnom Penh.

Ms. Nareth said that if the World Bank commences lending to Cambodia before she and other evictees receive a fair deal, the international lender will have betrayed the former Boeng Kak residents.

“If the World Bank lends money to the government, it must do so on the condition that it finds a solution for us,” she said.

(Additional reporting by Sek Odom)

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