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.
Latest Development on PDF for PPP Projects
I. The establishment of the Project Development Facility for PPP Projects was mandated by Article 12 of the Law on Public-Private Partnerships.
II. Guidelines on Project Development Facility for PPP Projects, stipulated in the SOP for PPP Projects was promulgated under Sub-Decree No. 174 ANKr.BK dated August 31, 2022.
III. The Project Development Facility (PDF) for PPP Projects is a revolving fund established by the Government of the Kingdom of Cambodia to finance the preparation of pre-investment studies, project documentations, and assistance in the bidding process of PPP Projects until financial close of the PPP Contract.
IV. With approval from the Minister of Economy and Finance, the PDF for PPP Projects received a seed fund of USD 6.5 Million from the National Budget, for the financing of preparation stages of PPP Projects.
First PPP Project to utilize the PDF for PPP Projects:
The Ministry of Economy and Finance, signed a contract with MISCA Advisors to provide TA services using funds from the PDF for PPPs, to conduct an update of the Feasibility Study and procurement for the Kampot Tourism Port.
Structure for Implementation of PDF:
The establishment of a Project Management Unit to implement PDF for PPP Projects was promulgated under Prakas No. 709 MEF.BrK dated October 20, 2022.
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.
How to Apply
The IA will need to submit an application in a prescribed format, which include Project Information and Service Requirements and Terms of Reference of the TA as follows:
SOURCES OF FUNDS
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.