The International Finance Corp (IFC) signed a deal on Wednesday with the Cambodian government to set up a public-private partnership (PPP) to construct a US$200 million logistics complex in Cambodia’s coastal province of Sihanoukville.

Once completed, the complex, according to the IFC, is expected to cut logistics costs in Cambodia, which are among the highest in east Asia and represent a key constraint to the country’s competitiveness and diversification.

“The Sihanoukville Logistics Complex is one of the two priority logistics hubs to be developed in Cambodia,” says Sun Chanthol, the country’s transport minister. “Our objective is to position Cambodia as a regional logistics transfer hub in Southeast Asia. [And] by working with the IFC, we can leverage their global expertise as we explore best options to leverage private sector engagement in the development of this critical logistics infrastructure.”

Winning bid by late 2024

The IFC, as the exclusive lead adviser, will structure the PPP and help the government select a qualified private developer via an international competitive tender.

The winning bid is likely to be granted by late 2024, with the hub to be constructed over three years.

Under its long-term contract, the winning developer, the IFC notes, will have to finance, develop and operate the infrastructure facilities, along with other systems within the complex.

“The project is expected to be developed in phases,” the IFC states, “with an overall capital cost estimate of about US$200 million.”

Infrastructure vital for exports, connectivity

Big infrastructure investments are “vital” to facilitate the export of manufactured goods and boost Cambodia’s supply-chain and logistics connectivity with the region, shares Asad Yaqub, the IFC’s local representative.

“This is a project that will be structured in line with global best practices to create a competitive market and draw qualified investors,” he adds. “Bringing in private sector financing will help reduce the burden on the country's finances and also set a precedent for developing transport and logistics PPP transactions in the country."

With good road, railway and airport connections, the new complex is expected to complement Sihanoukville’s port, which is the country’s sole deepwater port handling two-thirds of its container throughput.

The IFC points out: “A modern and transport-integrated logistics complex supporting the port will help accelerate the movement of exports and imports, and reduce port congestion.”