Development and assistance for water and sanitation

The Royal Government of Cambodia (RGC) has made developing the water, sanitation, and hygiene (WASH) facilities an important factor in moving the country to reach the sustainability goals. This development needs large funding to reach the entire population with a big gap between urban and rural areas, especially with the poor regarding coverage. This gap is hoped to be massively reduced, especially in rural areas, but there have been problems reaching the targets.¹

National Action Plan for Rural Water, Sanitation, and Hygiene 2019-2023 (NAP II)

The National Action Plan for Rural Water, Sanitation and Hygiene of 2019-2023 (NAP II) is the ministry of Rural Development’s answer to bridge the gap between urban and rural areas and help Cambodia to reach its goal under the sustainability goals (SDGs). The NAP II had a target of 90 % coverage to be attained by 2023 and was specified for access to basic water supply, sanitation, and hygiene services which would help reach the sustainability goal of water access being universal (100%) by 2030 and basic sanitation also being universal and safely managed sanitation being at 50% according to the SDGs. For sanitation and handwashing, the progress has been above the target in the SDGs, but for access to water, the actual progress lags behind the targets. The NAP II has estimated that the total cost for rural development projects is 280.6 million USD from public funding and 266.8 million USD from households. The NAP II forecasts that the annual funding from both the governmental budget (4.8 million USD), foreign aid (7.3 million USD), and financial development NGOs (8.7 million USD) is at a total of 20.8 million USD while the estimated annual cost is 56.1 million USD which is a funding gap of 35.3 million or 62.9%.² The Sanitation Finance Strategy focuses on both Urban and Rural sanitation and finds that the average annual sanitation expenditure is 23.4 million USD from national government, sub-national governments, development partner grants, and development partner loans. The total life cycle costs (cost of buying the product to the maintenance) annually to reach the sanitation goals are 935 million USD. In comparison, the total annual funding is 843 million USD directly from households and 23.4 million USD, which means a gap of 68 million USD. At present, the public expenditure is just 0.08% of the total GDP, but there is a plan to raise it to the minimum required (for capital costs only) of 1.5% to help solve the funding gap for sanitation.³

Addressing the funding gap

To address the funding gap, the major strategies are to either take out loans for WASH projects, gain resources through Development assistance, or mobilize resources through private-public partnerships (PPP).

Development assistance

This funding gap is hoped to be helped by mobilizing both subnational sources and international partners and by running down the costs. The development assistance is done both through grants and through loans. The main international partners are the Asian Development Bank (ADB), Agence Française de Développement (AFD), China, World Bank, UNICEF, US Aid, AUS Aid, Japan International Cooperation Agency (JICA), Korean International Cooperation Agency (KOICA), and the European Union. They invest in both smaller projects through different NGOs to bigger projects like the sewage system in Siem Reap.⁴

According to the CDC ODA database under the Cambodia Sustainable Development Goals, goal 6 of clean water and sanitation ADB has funded ongoing projects worth 516,140,000 USD, AUS aid 100,347,910 AUD (62,925,163 USD), China 1,760,636,000 CNY (242,129,974 USD), EU 30,246,900 EUR (31,525,413 USD), AFD (France) 373,177,055 EUR (388,950,961 USD), JICA (Japan) 17,417,644,210 Yen (111,794,539 USD) and 931,412 USD, KOICA (Korea) 288,858,000 USD, World Bank 263,556,091 USD and US Aid (USA) funding 92,978,076 USD worth of WASH project.⁵

Funds from official development assistance organizations (ODA) are not enough to cover the costs for WASH programs, so one area for the ODAs is to help catalyse private investments into WASH programs to ensure that this gap is filled.⁶

Another way to strengthen private participation is through public-private partnerships (PPP). These also can get support from ODA, which helps the private companies to get funding and support them in their dealings with the public sector. Besides its strength in mobilizing private resources, it is also a good way to make it more effective and make technological advancements available. The PPPs can look different, like build transfer operate (BTO) agreements, where the private company builds the facility and then transfers it to the appropriate public company, but they will continue operating the asset to recoup their investment.⁷

Loans

In addition to large-scale investments, microfinance institutions play an important role in financing WASH projects at the household level. The NGO Water.org uses innovative approaches, such as WaterCredit, to provide microloans for water and sanitation improvements, especially in underserved rural communities. These loans allow households to invest in private solutions, such as latrines or water filters, which can be crucial for improving access to safe water and sanitation in rural areas.⁸ Some other NGOs are active in current WASH programs to a certain extent like:

• WaterAid
• Resource development international (RDI)
• Population Service International (PSI)
• OXFAM Novib
• Save the Children
• Samaritan’s Purse International Relief (SPIR)
• ClearCambodia
• Cambodian Community Dream Organization (CCDO)
• Water for Cambodia
• Planet Water Foundation

While banks and other financial institutions are crucial in supporting private utility companies, lending requirements can be restrictive, especially for small and medium-sized enterprises. Microfinance institutions help address this gap by offering more flexible lending terms, although their impact is often limited to smaller-scale, household-level interventions.⁹

To reduce the cost, the development is done by making the basic infrastructure and raising awareness and not directly subsidies most of the hardware for sanitation and only doing it for the poorest citizens. This approach aims to empower local communities and households to take on a greater share of the costs, with support from various stakeholders.¹⁰

Phnom Peng Water Supply Authority

When it comes to the urban WASH program, the success of the Phnom Penh Water Supply Authority has supplied Phnom Penh with water to a great extent. The Phnom Penh Water Supply Authority has expanded its service with the help of development organizations like JICA. The PPWSA has achieved impressive results, including increased access to clean water, high levels of operational efficiency, and profitability, allowing it to reinvest in its infrastructure and service expansion. PPWSA’s success has earned it international recognition, including the prestigious Stockholm Water Industry Award. The PPWSA continues to expand its services, particularly in poorer areas, as shown below.¹¹

Licensing in rural areas

A challenge for many of the rural areas is the licensing, with many areas not having any licenced water supplier that provides piped water. In 2020, the statutes looked like this: 

• 37% of all households are in villages licenced from private operator-LC.
• 24% of all households are in villages that have a private operator that has applied for a licence-ALC.
• 16% of all households are in villages with public water management-PUB
• 2% of all households are in villages with community management of water utilities-COM
• 21% of all households are in villages that are not occupied with any licenced utility-NOC¹²

Being in a licenced village does not always mean that the village is covered, and being in a non-licensed village does not necessarily mean that there is no piped water, just that it is not registered with governmental authorities. This was an extensive problem that the operators would not register for licensed but it has been reformed by extending licensing from 3 years to 20 years.¹³

Out of 53% of all households live in villages covered by piped water network while 47% live in villages that are not covered by a piped water network, and most of them are in villages without licences. The development to connect the non-covered villages has an estimated cost of 150 million USD which almost 90 million is needed from private licenced (LC and ALC) and 60 million needed for NOC villages. It is estimated to help the private sector start investing in these areas. There is a need to give a grant of 49 million USD.¹⁴

Ongoing projects

According to the CDC’s ODA database, under the Cambodia Sustainable Development Goals, goal 6 of clean water and sanitation received around 1,825 million USD in total. As of January 2025, there are around 62 current running projects that are supported by international organizations, including ADB, World Bank, WHO, UNICEF, and IAEA, and development partners like the United States, EU, Japan, South Korea, and others.¹⁵ It is important to emphasize that, based on the information on the CDC’s ODA website, the entire budget is not fully dedicated to the development in the WASH sector. The budget, however, is also allocated to support and develop the other CSDGs such as education, health care, and poverty reduction. The table illustrates some of the WASH projects supported by development partners.

Related to Development and assistance for water and sanitation

• SDG 6 Clean water and sanitation

• Infrastructure

• Water and sanitation