The funding will be used to improve the capacity of agriculture businesses in six provinces across Cambodia to process cassava, cashews, mangoes, vegetables, and native chickens
The Asian Development Bank (ADB) has agreed to provide $70m in financing to strengthen agricultural value chain and food safety in Cambodia.
The funding will be used to improve the capacity of agriculture businesses in six provinces across Cambodia to process key agricultural products, including cassava, cashews, mangoes, vegetables, and native chickens.
The aim of the Agricultural Value Chain Competitiveness and Safety Enhancement Project is to benefit approximately 230 agricultural companies and 50 agriculture businesses.
The businesses in the provinces of Kampong Cham, Kampong Thom, Oddar Meanchey, Preah Vihear, Siem Reap, and Tboung Khmum are expected to get benefited by the project.
According to ADB, the COVID-19 pandemic has interrupted the agricultural supply chains and also reduced incomes as well as market opportunities for farmers and agribusinesses.
The new project will provide access to credit for agriculture and agribusinesses that attract only about 10% of total formal financing.
The project will implement mutually reinforcing financial schemes, including credit lines and credit guarantees.
ADB Natural Resources and Agriculture principal economist Takeshi Ueda said: “Agriculture can contribute to Cambodia’s economic growth and diversification if local small and medium-sized agribusinesses can improve their ability to process high-value agricultural products and market them domestically and overseas.
“Private investment in agriculture, along with better access to credit and high-quality raw agricultural products, will help Cambodian agribusinesses unleash their growth potential, create jobs, and improve rural livelihoods.”
The project will help agricultural cooperatives to access high-yield, drought-resilient, disease-resistant crop seeds and other planting materials to support the research and development of crop seed varieties and poultry breeds.
Additionally, it is also planning to initiate a green financing mechanism which will be supported by a $5m funding from the Association of Southeast Asian Nations (ASEAN) Infrastructure Fund.
ADB will also provide $25m funding from Agence Française de Développement and a $3m financing from the Japan Fund for Poverty Reduction.
In July this year, ADB and the Government of Timor-Leste signed a $3m grant agreement to support the development of the coffee sector in the country.