Project Description
On August 2, 2019, MIGA issued a guarantee for $74 million to cover a non-shareholder loan from Mizuho Bank, Ltd. of Japan, acting through its Singapore Branch and ING Bank N.V. of the Netherlands, acting through its Singapore Branch, to Cambodian Transmission Limited for its refinancing of a transmission project in the Kingdom of Cambodia. The $74 million guarantee will provide coverage for the loan principal, future interest payments and MIGA premium on the loan for a period of up to 10 years against the risks of Transfer Restriction, Expropriation, War and Civil Disturbance, and Arbitral Award Default. Mizuho Bank, Ltd. is acting as agent for the Guarantee Holders. In August 2021, ING transferred a portion of the MIGA-covered loan to Bayfront Infrastructure Capital II Pte. Ltd. of Singapore, which was subsequently transferred to Bayfront Infrastructure Management Pte. Ltd. of Singapore in July 2024.
Cambodian Transmission Limited is the existing operator of a concession to finance, construct and operate two substations and a 110km high voltage transmission line between the two substations that feed into the 230kV transmission network that connects the Phnom Penh region with power generators in the east and northeast of the country. The network also provides interconnection to the Cambodia-Vietnam and Cambodia-Thailand borders in the south and northwest of the country respectively.
The refinancing will stabilize the project’s cash flow and reduce its exposure to interest rate risk. By obtaining an interest rate benchmark-linked loan from international lenders, Cambodian Transmission Limited will be able to enter into an interest rate swap for up to 80 percent of the exposure, helping to improve predictability, reduce volatility of its debt service payments and enable enhanced long-term financial planning.
Environmental Categorization
The Project has been classified as Category B according to the MIGA Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary.
Development Impact
MIGA’s support for the refinancing of existing power infrastructure in Cambodia paved the way for commercial funding to replace financing previously provided by the Export-Import Bank of Malaysia Berhad, and reflects the ongoing commitment of international lenders to Cambodia in support of the country’s longer term goals of diversifying its economy and consolidating its electrification program.
The development of Cambodia’s transmission sector is a national priority. At this early stage in the nation’s infrastructure build-up, refinancing is anticipated to draw needed private investments from local and international developers. This network expansion plan focuses on strengthening the interconnections between the nation’s Central-West and Central-South to accommodate transmission from new thermal and hydro power plants to the Phnom Penh region, where most electricity demand is currently concentrated.
MIGA’s support for this Project is consistent with the Agency’s priorities of supporting investment into countries eligible for concessional financing from the International Development Association. This Project is MIGA’s first transaction in Cambodia.
