Project Development Facility

Background

The Government of Kingdom of Cambodia (GKC - hereafter referred as the Government) has established a central Project Development Facility (PDF) under its Public Investment Management System Reform Strategy 2019-2025 (PIMSRS 2019-2025) to finance the development and preparation of public investment projects. The objective of the PDF is to act as a dedicated fund that finances project development, preparation and procurement of public investments financed through official development assistance, national budget, and the Public-Private Partnerships (PPP) mechanism. The central PDF mainly consists of three windows for financing namely: the Externally Financed Projects Window, the National Budget Financed Projects Window, and the PPP Projects Window.

The establishment of the PPP Projects Window (hereafter referred to as PDF for PPPs) is mandated by Article 12 of the Law on PPP. The PDF for PPPs will finance transaction service activities by providing financial support to the Implementing Agencies (IA) for undertaking quality preparation and procurement of PPP projects and the associated transaction services. The Guidelines on PDF for PPPs are consistent with the principles defined in the guidelines on the central PDF issued under the Action Plan for the PIMSRS 2019-2025.

The project preparation and transaction services are normally referred to as Transaction Advisory Services (TAS) and are provided by a firm or a consortium of firms which, collectively, is termed as the Transaction Advisor (TA). The PDF for PPPs will help improve the enabling environment that catalyzes PPPs in infrastructure investments through structural strengthening of the preparation, transaction, and negotiation process for implementing PPP Projects in Cambodia.

Eligibility

The financing from the PDF for PPPs is available only for the projects in the list of Priority PPP Projects, as determined and approved by the MEF after undertaking the selection and prioritization of PPP Projects in accordance with SOP Vol. II: Guidelines.

SCOPE OF PDF FOR PPP PROJECTS

Solicited PPP Proposals

The PDF for PPPs can be used for financing of the full range of TAS for solicited PPP proposals. The scope of the services include, but not limited to:

I). Preparation of Feasibility Studies. ( and pre-feasibility may be considered where packaged together with the Feasibility Studies and is not standalone);

II). Due Diligence of Feasibility Studies;

III). Demand studies, including willingness to ‘pay’ and ‘use’ surveys;

IV). Environment and Social assessment studies;

V). Project and Financial Structuring;

VI). Financial modeling, legal, regulatory and tax assessments;

VII). Procurement for the Selection of the Private Partner;

VIII). PPP Contract negotiations and award;

IX). Preparation of PPP Contract Management Manual; and

X). Incidental transaction support assistance till contract/financial close

Unsolicited PPP Proposals

Based on the Framework Agreement (FA), the Private Sponsor or Proponent to bear all the costs of for the development and preparation of USP project and hence no financing is required from the PDF for PPPs.

In exceptional cases, provisions and budget for the Government for undertaking the due diligence have not been specifically included in the FA, the PDF for PPPs can be used but subjected to:

• (i) a written agreement from the Private Sponsor or Proponent that it will reimburse the expenditures incurred by the Government prior to the approval of the Feasibility Studies by the IA in case of expenditures for the due diligence of the Feasibility Studies and prior to the signing the PPP Contract in the case of assistance for contact negotiations, and
• (ii) prior approval of the Public Investment Committee (PIC) of the MEF.