ADB Approves $50M Loan to Boost Governance and Service Delivery in Cambodia

The Asian Development Bank (ADB) has approved a $50 million policy-based loan to support Cambodia’s ongoing efforts to strengthen governance, public financial management, and service delivery. The financing, part of Subprogram 1 of the Strengthening Governance for Improved Service Delivery Program, aims to help the government deliver more equitable, efficient, and resilient public services to its citizens.

Building on Long-Term Reform

The initiative continues ADB’s long-standing support for Cambodia’s Public Financial Management Reform Program (PFMRP), which is now in its fourth phase. The program is designed to broaden and deepen reforms that ensure government finances are managed more effectively and transparently.

Key reform areas include:

• Revenue and expenditure management: Strengthening institutions responsible for tax collection and government spending, enabling the state to create fiscal space for vital social and economic programs.

• Public investment governance: Improving transparency and accountability in large-scale projects to encourage private investment, particularly through stronger public–private partnership (PPP) frameworks.

• Procurement systems: Enhancing competitiveness and efficiency in procurement processes to ensure public resources are spent effectively.

Driving Economic Growth and Social Impact

ADB Country Director for Cambodia, Jyotsana Varma, described the program as a “catalyst for transformative change”. She emphasized that the reforms supported under the program are expected to have long-term impacts on both economic growth and the quality of life for Cambodians.

The program is expected to generate over $2 billion in additional revenues and over $3 billion in efficiency savings by 2028. These fiscal gains will allow the government to expand the reach and quality of public services such as health, education, and infrastructure, benefiting communities nationwide.

“By promoting efficiency in revenue and expenditure management systems, accelerating growth through resilient public investments, and improving performance management, this program will directly improve lives through better public services,” Ms. Varma said.

Sequenced and Sustainable Reforms

Subprogram 1 lays the groundwork for Subprogram 2, which will build on the achievements of the first phase. The sequenced approach is designed to help Cambodia implement reforms in a coordinated, step-by-step manner, ensuring that changes are sustainable and fully integrated into government systems.

This programmatic approach reflects ADB’s commitment to long-term reform in Cambodia, aligning with the country’s national development strategy and reform agenda. It also ensures that reforms are not only initiated but institutionalized—embedding them into the functioning of government for years to come.

Governance Reform as a Growth Enabler

Improved governance is increasingly recognized as a critical driver of Cambodia’s economic transformation. By strengthening financial management systems, the government can allocate resources more efficiently, build resilience against economic shocks, and create a more enabling environment for private sector development.

Enhanced governance and transparency are also expected to bolster investor confidence in Cambodia, particularly as the country seeks to diversify its economy and strengthen partnerships in the Asia-Pacific region.

Looking Ahead

The approval of Subprogram 1 marks an important milestone in Cambodia’s governance reform journey. With ADB’s support, the country is positioning itself to improve accountability, foster inclusive growth, and ensure that public resources are used to deliver tangible benefits to its people.

If implemented successfully, the reforms are expected to help Cambodia achieve more resilient public finances, improve the quality of service delivery, and lay a stronger foundation for long-term sustainable development.