The Government of Cambodia is preparing to secure over USD3 billion in concessional loans in 2026 to finance public investment projects aimed at enhancing infrastructure, energy, irrigation, education, and digital connectivity. The Draft Law on Finance for Management 2026, released by the Ministry of Economy and Finance (MEF), authorises borrowing of USD2.25 billion Special Drawing Rights (SDR), equivalent to approximately USD3.1 billion, on highly concessional terms with below-market interest rates and favourable repayment schedules.
The funds will target large-scale infrastructure and public-service developments to strengthen economic productivity and competitiveness. The MEF will act as the legal authority to negotiate and sign agreements under the Prime Minister’s approval and must report progress to the National Assembly and Senate biannually. Economists highlight that these investments aim to generate jobs, reduce logistics costs, improve agricultural resilience, and attract private sector participation. Outcome-based indicators—such as rural road coverage, electricity distribution expansion, and digital service access—will guide project assessment.
Cambodia’s public debt remains sustainable, standing at USD12.67 billion at the end of Q2 2025, with external debt accounting for 99 percent. Total public debt is 18.4 per cent of GDP, well below the 40 per cent cautionary threshold. The majority of the new loans will be highly concessional, carrying an average grant element of 36 per cent, keeping the risk of debt distress low. The borrowing aligns with the government’s medium-term strategy to enhance infrastructure, human capital, and national competitiveness while maintaining fiscal sustainability.