Ministry of Economy and Finance

General Department of Public-Private Partnerships

Home

Financial Support Mechanisms

State Support

State Support provided to PPP Projects may include the following:

  1. Viability Gap Financing (VGF): is the Royal Government's subsidy provided to the Private Partner to reduce its capital expenditure, while increasing the financial viability of the project. The payment for such a subsidy shall be based on specific performance milestones after the commencement of construction and can be renewed for up to 2 (two) years after the completion of construciton. Detailed principles for the VGF shall implemented in accordance with the procedures for the management of the VGF Facility.
  2. Availability Payment: is the payment made infull or in part for the service fees of the Private Partner for the operation of PPP project Asset(s), and/or the provision of public services to public users. The availability payment can be made in cases where the Royal Government has agreed that the service fees to be collected by the Private Partner from the public users are insufficient, or cannot, or should not be collected from the public users. Availability payments shall be made only after the construction, if applicable, is completed, and the operation has commenced.
  3. Government Contingent Liabilities: are the types of guarantees provided to the Private Partner or related entitites in special cases in addressing potential impacts from unforeseen circumstances and/or risks as stipulated in the PPP contract. The decision of the Royal Government to provide guarantees shall be in accordance with the applicable laws and regulations of the Kingdom of Cambodia. Depending ont he nature of each PPP project, the Royal Government may grant guarantees in the following forms:
  • Performace guarantee: is a type of guarantee that grants compensation int he event that the Implementing Agency or any other public entities have not fulfilled obligations as stipulated int he PPP Contract or relevant agreements.
  • Sovereign or political risk guarantee: is a type of guarantee that grants compensation in the event that political actions or the government policies resulted in adverse impact ont he Private Partner, mainly including expropriation, nationalization and violence driven by the political activities.
  • Other guarantees: are other types of guarantees approved by the Royal Government of Cambodia in accordance with application laws and regulations.

       4. Asset Contributions: is the contribution of state asset(s) to the PPP project.

      5. Investment Incentives: is the provision of investment incentives, and/or the issuance of policies favorable for investments in accordance with Chapter VIII of the Law on PPP.

Project Development Facility

Project Development Facility (PDF): provide funding to Implementing Agencies (IAs) to cover the costs of the consultant(s) to assist with the project development and/or appraisal, the selection of Private Partner and other relevant tasks