French Development Agency Pledges Continued Investment and Support for Cambodia's Water Sector Reforms

The continued reform and investment in Cambodia's water sector have been re-emphasized by the French Development Agency (AFD). Laetitia Habchi, the newly appointed Country Director for AFD in Cambodia, met with Hem Vanndy, Minister of Industry, Science, Technology and Innovation, to discuss strengthening cooperation on water sector reforms. Key areas of discussion included enhancing law enforcement, improving the efficiency of water operators (both public and private), facilitating private sector financing, and ensuring the long-term financial sustainability of the sector. Minister Hem Vanndy stated that AFD is a strong and long-standing partner for Cambodia in the water sector, but acknowledged that the sector requires significant further reform and investment. Cambodia is striving to expand safe and reliable water services, necessitating improvements in the efficiency of both public and private water operators. "We have achieved many successes together, but there are still many challenges ahead that need to be addressed, especially how to ensure Cambodia achieves its set goals," the Minister remarked. As part of the sector's reform and the reinforcement of the Law on Water Management, the government has authorized the establishment of a water regulator, with the regulatory framework and institutional structures currently being prepared. This reform will require water supply operators to adhere to high standards and increase their investments, which will demand greater financing. Minister Hem Vanndy noted that banking institutions have begun providing credit to the water sector, including concessional financing for women-led operators. He encouraged AFD to explore possibilities for expanding support to private water operators, in addition to financing channeled through the government. Ms. Habchi, who took up her post as AFD Country Director for Cambodia in September, following assignments in Mauritius and Seychelles, commented, "Water is a key sector for AFD in Cambodia and will remain a key sector going forward, so we will continue to work with the Ministry." She added that AFD will encourage Proparco, its private sector arm, to continue supporting reforms and private investment in this area. The two parties also discussed Cambodia's upcoming graduation from Least Developed Country (LDC) status in 2029 and its potential impact on concessional financing, as substantial investment in strategic infrastructure like the water sector will continue to be essential.