Government Goes to China in Search of New Loans

Prime Minister Hun Sen will travel to China on Saturday to meet with the rising superpower’s new leadership, in a trip the government expects to yield nearly $2 billion in loans and aid. Most significantly, the Government is hoping to secure Chinese funding for a 1.67 billion oil refinery project in Kampot province, which would ensure China’s prime position in Cambodia’s yet-to-take-off oil industry. … The statement [from the Ministry of Foreign Affairs and International Cooperation] lists eight deals including a memorandum of understanding between the National Bank of Cambodia and China Banking Regulatory Commission, an “agreement on economic and technical cooperation” worth 48.38 million, more than $73 million in concessional loans for an irrigation project in Kompong Thom province and a bridge in Kandal province. According to the statement, the government also expects to sign a memorandum of understanding on a 5-million-ton-a-year oil refinery project, involving China Development Bank and China Export and Credit Insurance Corporation, both Chinese state-owned companies, to the tune of $1.67 billion. China’s development bank is known as one of China’s “policy banks”- meaning that it gives loans in support of Chinese foreign policy. Such banks have funded Chinese-built hydropower dams in Cambodia. In December, China Perfect Machinery Industry Corp.- which is majority owned by state-owned industrial giant SINOMACH- and Cambodian Petrochemical Company- which is chaired by cigarette magnate Kong Triv- agreed that work would begin on the oil refinery this year. … Two Chinese companies, China National Offshore Oil Corporation and China Petrotech Holdings ltd., have been grated exploration blocks off Cambodia’s coat to search for oil and gas. …

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