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Access to Finance Program for Small Water and Rural Electrification Enterprises

Start date End date Budget Funding
11/12/2014 11/12/2019 23000000 € AFD, European Union

Partners

North partner(s) : ARTELIA, See / Saw

South partner(s) : CWA, EAC, ISEA, MIH, MME, REA

Project

Germain Priour

In Cambodia, over the past two decades, a tremendous amount of formal and informal small enterprises have invested “spontaneously” in unstructured water supply and electricity utilities. However, these enterprises still face problems in technical and financial management. The quality of infrastructure planning, design, financing are quite low. To expand their infrastructures, they encountered also difficulties in debt financing preparation and negotiation. The access to finance for small enterprise is quite low in Cambodia. Consequently, in April 2014, the Agence Française de Développement launched the Access to Finance Program for Small Water and Rural Electrification Enterprises (SWEs-REEs). It ambitions are to promote the financing of small enterprises by dealing with all identified barriers for a sustainable access to commercial loans by REEs and SWEs. The AFD has provided the FTB a concessional credit facility and a risk-sharing mechanism called ARIZ dedicated to financing the small enterprise in the water supply and electricity sectors and to secure the FTB bank. The credit facility is sized at 10 million USD for electricity and a minimum of 5 million USD must be dedicated to the financing of water supply.

The program aims to: i) to expand access to safe drinking water and electricity in small towns and rural areas by providing adequate financing to REEs and SWEs through loans provided by a local commercial bank (Foreign Trade Bank – FTB) ; ii) to help the FTB to develop an attractive financial offer for REEs and SWEs; ii) to support FTB to develop its portfolio of water and electrification projects and to perform due diligence, in order to ensure the sustainability of this new business line; iv) to support REEs and SWEs in developing their business and enhancing their business practices to a level suitable for financing by the FTB. This program aims to improve the access to safe water and sustainable access to electricity for about 410, 000 Cambodian peoples.

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