Background
The Southwest Phnom Penh Irrigation and Drainage Rehabilitation and Improvement Project (III) concerns urban and peri-urban water management infrastructure in the greater Phnom Penh area. Irrigation and drainage infrastructure controls water levels to reduce urban flooding and support agricultural use in peri-urban areas of Phnom Penh.
The Government of Japan provides concessional financing to partner countries through yen loans that fund rehabilitation and improvement of public infrastructure. The project designation “(III)” indicates this financing is the third loan package associated with the Southwest Phnom Penh rehabilitation programme.
Key Developments
On 22 June 2026, the Ministry of Foreign Affairs and International Cooperation recorded an Exchange of Notes and accompanying documents between Deputy Prime Minister and Minister PRAK Sokhonn and Ambassador UENO Atsushi, confirming an extension of a Government of Japan yen loan. The agreed loan amount is JPY 24,237,000,000, approximately USD 162.7 million, to support implementation of the Southwest Phnom Penh Irrigation and Drainage Rehabilitation and Improvement Project (III). Source: Ministry of Foreign Affairs and International Cooperation announcement.
Institutional Role
The Ministry of Foreign Affairs and International Cooperation acts as the central signatory for bilateral financing agreements and exchange-of-notes procedures on behalf of the Royal Government of Cambodia. The Ambassador Extraordinary and Plenipotentiary of Japan signed on behalf of the Government of Japan to formalise the loan extension.
Policy Context
Yen loans are an Official Development Assistance instrument used to finance public infrastructure and typically require formal exchange-of-notes between sovereign counterparts before disbursement. Financing agreements for irrigation and drainage projects are part of Cambodia’s broader public investment framework for urban water management and climate resilience.
Source
Official announcement: Ministry of Foreign Affairs and International Cooperation, Cambodia (22 June 2026). Original post: https://www.facebook.com/mfaic.gov.kh/posts/pfbid0DrPF35YeQKWw7yvnmDWV6rfuM4evZaLUwWQZm1RAFekK7rfkBhJtvtLDW9euLjDKl
