📋 Tender Overview
Project Name
Inclusive and Sustainable Finance Development Program, Subprogram 1
Project Number
58538-001
Country / Economy
Cambodia
Project Status
Proposed
Project Type / Modality of Assistance
Loan
Source of Funding / Amount
Loan: Inclusive and Sustainable Finance Development Program, Subprogram 1
Concessional ordinary capital resources lending US$ 50.00 million
Sector / Subsector
Finance / Banking systems and nonbank financial institutions - Finance sector development - Inclusive finance - Money and capital markets
Gender
Description
Building on subprograms 1-3 of the Cambodia Inclusive Financial Sector Development Program (subprogram 3 was approved in September 2021) and complementing the ongoing implementation of subprogram 2 of the Cambodia Trade and Competitiveness Program, the proposed Inclusive Sustainable Finance Development Program aims to strengthen financial sector capacity, stability, and performance for both banking and non-banking sectors. The program will further support the development of digital finance infrastructure and sustainable finance. The program is aligned with the National Strategic Development Plan (NSDP) 2024-2028 which forms part of a broader framework set by the Cambodian government to guide the country's development efforts over the next five years. The NSDP 2024-2028 aligns with key national priorities and policies, particularly the Pentagonal Strategy Phase I, a long-term socioeconomic plan supporting Cambodia Vision 2050 which aims to transition Cambodia to a high-income country by 2050.
Project Rationale and Linkage to Country/Regional Strategy
Positive macro-economic conditions and outlook. Cambodia's economy grew by an estimated 6.0% in 2024, driven by a rebound in garments, non-garment expansion, and tourism recovery. The 2025 outlook remains positive, with growth expected to hover around 6%, supported by external demand for manufactured goods and continued recovery in the tourism-related sector. However, the construction and real estate sectors face ongoing challenges, including rising non-performing loans and declining foreign direct investment inflows. Inflation eased to 0.8% in 2024 due to stable food prices and lower fuel costs but is projected to rise to 3.7% in 2025 after bottoming out. The export-oriented economy faces significant headwinds, with increasing downside risks such as weakened exports due to tariffs on Cambodian goods amid escalating global trade barriers, slower growth in major trading partners, and the impact of rising non-performing loans on financial sector stability. Public debt remains sustainable, with external debt increasing from $11.9 billion in 2024 to an expected $13.2 billion (26% of GDP) in 2025. The government plans to issue approximately $123 million in mostly long-term bonds in 2025. The risk of public debt distress remains low.
ADB's Assessment of Macroeconomic Conditions and Policies. The Asian Development Bank (ADB) notes that Cambodia's macro
