Japan Provides 17.7 Billion Yen ODA Loan for Sihanoukville Port Terminal

The Government of Japan has announced, via Ministry of Foreign Affairs Notice No. 293 published in the Official Gazette dated September 24, 2026, the provision of a yen loan of up to 17.776 billion yen (17,776,000,000 yen) to implement the Sihanoukville Port New Container Terminal Development Project (Phase II) in the Kingdom of Cambodia. The loan will be provided to the Government of the Kingdom of Cambodia through the Japan International Cooperation Agency (JICA) in accordance with the relevant laws and regulations of Japan. The notice was issued in the name of Hayayuki Fujii, Acting Minister for Foreign Affairs and Minister of State, and the exchange of letters regarding the provision of the yen loan took place in Phnom Penh on July 13, 2026.

The notice confirms the contents of the understanding recently reached between representatives of the two governments, and the loan will be utilized based on a loan agreement to be concluded between the Government of the Kingdom of Cambodia and JICA. The purpose of the loan is to promote the stability and development efforts of the economy of the Kingdom of Cambodia. The terms of the loan and the procedures for its use shall be governed by the loan agreement within the scope of this understanding.

Loan Terms: Ten-Year Grace Period and Annual Interest Rate of 0.45%

The primary terms stipulated in the understanding are as follows:

• The repayment period shall be 20 years after a grace period of 10 years.
• The annual interest rate shall be the applicable Tokyo Term Risk-Free Rate for a 6-month loan plus 0.45 percent.
• If the above interest rate is lower than 0.1 percent, the annual interest rate shall be 0.1 percent.
• If a portion of the loan is used for payments to consultants for the project, the annual interest rate for that portion shall be 1.1 percent.
• The disbursement period shall be 5 years from the date the loan agreement enters into force and may be extended with the consent of the relevant authorities of both governments.

Procurement to Follow International Competitive Bidding and JICA Guidelines

The procurement of goods or services under the loan shall be carried out in accordance with JICA’s guidelines for procurement, specifically those prescribing international competitive bidding procedures. The scope of eligible procurement countries shall be determined between the relevant authorities of both governments, and a portion of the loan may be allocated to meet eligible local currency requirements for the implementation of the project.

• The loan shall be used to finance payments made by the executing agency of the Kingdom of Cambodia to suppliers, contractors, or consultants of eligible countries.
• The Government of the Kingdom of Cambodia shall refrain from imposing restrictions that hinder fair and open competition between shipping companies and marine insurance companies regarding the ocean transport and marine insurance of the goods purchased.
• Japanese nationals whose services are required in connection with the supply of goods or services shall be granted the facilities necessary for entry into and stay in the Kingdom of Cambodia.
• The Government of the Kingdom of Cambodia shall exempt the loan and interest from JICA from financial charges and taxes, exempt the income of Japanese companies from taxation, and exempt customs duties and related financial levies on the import and re-export of materials and equipment necessary for the project.

The letters were exchanged in Phnom Penh on July 13

The understanding was confirmed through an exchange of letters between the signatories of the Japanese side and the Cambodian side. The signatory for the Japanese side is Atsushi Ueno, Ambassador Extraordinary and Plenipotentiary of Japan to the Kingdom of Cambodia, and the signatory for the Cambodian side is Prak Sokhonn, Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation.

The Government of the Kingdom of Cambodia shall ensure that the loan is used properly and exclusively for the project, and not for military purposes. Furthermore, it shall ensure that the facilities constructed based on the loan are properly and effectively maintained and used for the purposes specified in the understanding, are not used for military purposes, and are not used as collateral for other loans. In the construction and use of the facilities, the safety of those engaged in the implementation of the project and the general public of the Kingdom of Cambodia shall be ensured and maintained.

The loan agreement shall be concluded after JICA has confirmed the feasibility of the project (including environmental and social considerations). The Government of the Kingdom of Cambodia shall, upon request, provide the Government of Japan and JICA with information and materials regarding the progress of the project’s implementation, as well as other information related to the project, and both governments shall consult with each other on matters arising from the understanding.

This public notice officially determines the conditions of a large-scale yen loan supporting port infrastructure development among Japan’s ODA to Cambodia, directly impacting the country’s logistics and trade foundation through the expansion of container handling capacity at Sihanoukville Port. Japanese companies are presented with opportunities for procurement participation and tax exemption measures, and the subsequent conclusion of the loan agreement and the progression of the disbursement period will be the practical focus of the project implementation.

Source: Ministry of Foreign Affairs Notice No. 293 (Official Gazette dated September 24, Reiwa 8, Acting Minister for Foreign Affairs and Minister of State Hayayuki Fujii).