Japan Invests in Cambodia's Deepwater Port

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Published Aug 24, 2017 7:12 PM by The Maritime Executive

The government-run aid organization Japan International Cooperation Agency (JICA) has given the green light to a $209 million low-interest loan for a new container terminal at Sihanoukville Autonomous Port, Cambodia's only deep-water seaport. The agency has also purchased a direct equity stake of 13.5 percent. Construction will start in 2019, and when completed in 2023, it will raise the port's capacity by about 450,000 TEU per year. 

JICA is a longstanding sponsor of Sihanoukville's development. The port suffered several decades of neglect due to Cambodia's internal conflicts, but in 1999, JICA funded its restoration and rehabilitation. Ten years later, JICA provided funding for the Sihanoukville Port Multipurpose Terminal Development Project, a new bulk terminal for vessels of up to 50,000 DWT. The projects have improved Cambodia's ability to participate in global markets; the once-impoverished nation's GDP is growing at a consistent seven percent per year, driven in part by a strong garment industry, and its exports are rising quickly. 

Sihanoukville currently handles about half a million TEU per year, and it does not have the capacity needed to support expected levels of growth. Thai seaports – Laem Chabang, Klong Yai and S.Kittawan – handle a significant share of Cambodia's cargo, but they impose an additional layer of customs inspections on Cambodian shippers. The Vietnamese port of Cai Mep also handles large volumes of Cambodian goods.

Separately, Chinese operator Tianjin Union Development Group says that it has nearly completed a greenfield breakbulk port in Cambodia’s Botum Sakor National Park, a protected area on a peninsula adjacent to Sihanoukville. UDG's lease covers 140 square miles of land, including fully 20 percent of Cambodia's coastline, and it will run for 99 years. The development also includes a major resort, a road across the park and a planned international airport.