Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry:
Project:
Loan Agreement:
Loan Amount:
Borrower:

Kingdom of Cambodia
Siem Reap Water Supply Expansion Project
March 29, 2012
7,161 million yen
The Royal Government of Cambodia

2. Background and Necessity of the Project(1) Current State and Issues of the Water Supply Sector in Cambodia
Access to safe water in the Kingdom of Cambodia deteriorated to extreme levels as a result of acivil war that destroyed infrastructure, including water supply facilities, and continued until thestart of the 1990s. After the conclusion of the civil war, improvements were made to water supply
services primarily in Phnom Penh owing to collaboration among Japan and other donors, but thewater supply rate to regional cities remains low. Siem Reap City is Cambodia’s third-largest city,with a population of 233,000, and in addition to rapid population growth (11% per year) in recentyears, the city is home to the Angkor Wat ruins, which draw over 2.8 million tourists annually.
The city is projected to see a rapid increase in water demand going forward, but its only existingwater treatment facility is one constructed by Japan in 2006 through grant aid with a capacity of
9,000 cubic meters per day, yielding a water supply rate of approximately 25%, which is thelowest level of any major city in the country, in a situation where safe and stable water supply
services are failing to catch up with demand.
(2) Development Policies for the Water Supply Sector in Cambodia, and Priority of theProject
Access to safe water is one of the priority development goals in the National StrategicDevelopment Plan (NSDP) (2009 to 2013), and the National Policy on Water Supply andSanitation (NPWSS) (2003) also spells out a policy to strengthen urban water supplies in eachprovince. The Project is regarded as being consistent with these development policies andcontributing to the strengthening of water supply capacity in regional cities.
(3) Japan and JICA’s Policy and Operations in the Water Supply Sector
The country assistance program for Cambodia formulated in February 2002 aims to improvelacking social and economic infrastructure with “sustainable economic growth and the realizationof a stable society” as an area of focus, and the Project is consistent with this policy in that it isexpected to contribute to the improvement of the living environment in Siem Reap City and thedevelopment of the tourism industry. Moreover, the project development plan aims to engage inmaintenance and improvement of urban water supply facilities within the City Water Environment
Program (provisional title), and has recently provided the Niroth Water Supply Project (loan, 3.51billion yen) in FY2008. Since 2003, the Capacity Building for Water Supply System inCambodia Phases I and II (technical cooperation project, through 2012) has been being
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implemented, with the results of this technical cooperation being utilized in the implementation ofthe Project.
(4) Other Donors’ Activities
The Asian Development Bank (ADB) is carrying out the following rural water supply
improvement project for the water supply sector in Siem Reap Province.
• Second Rural Water Supply and Sanitation Sector Project: 2010 to 2015 ($21.0 million)(5) Necessity of the Project
The Project is in accord with Cambodia’s challenges and development policies and with Japanand JICA’s areas of aid focus. Consequently, it is highly necessary and relevant that JICA
should support implementation of the Project.
3. Project Description(1) Project Objective
The object of the Project is to broaden safe and stable water supply services in Siem Reap City,
which has a serious water shortage due to rapid urbanization and an increase in the number oftourists, by expanding water supply facilities, thereby contributing to the improvement of the living
environment and the vitalization of the tourism industry in the Project area.
(2) Project Site / Target Area: Siem Reap City, Kingdom of Cambodia(3) Project Components (including Procurement Methods):(i) Water diversion facilities, water pipe (approx. 13 kilometers) construction; (ii) water treatment
plant construction (60,000 cubic meters per day); (iii) laying of distribution pipes (approx. 217kilometers); (iv) consulting services (detailed design, bidding assistance, supervision of works,
human resource development/organizational strengthening, etc.)(4) Estimated Project Cost (Loan Amount)
7,700 million yen (yen loan amount: 7,161 million yen)(5) Schedule (Cooperation Period)
Planned for the period between March 2012 and June 2019 (88 months in total). The Project will becompleted at the service opening of the facilities (June 2018).
(6) Project Implementation Structure
1)
2)
3)
4)

Borrower: Royal Government of Cambodia
Guarantor: None
Executing Agency: SRWSAOperation and Maintenance System: SRWSA

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(7) Environmental and Social Considerations/Poverty Reduction/Social Development
1) Environmental and Social Considerations(i) Category: B(ii) Reason for Categorization: Under the JICA Guidelines for Environmental and Social
Considerations, put into effect in April 2010, the Project is deemed not to have major
unfavorable impact on the environment in light of the characteristics of the sector, theproject, and the region.
(iii) Environmental Permit: The Environmental Impact Assessment (EIA) report regarding theProject is expected to be approved by Cambodia’s Ministry of Environment.
(iv) Anti-Pollution Measures: Waste products generated during construction will be properly
disposed of in accordance with local regulations. Furthermore, regarding contamination
measures for after service, the SRWSA is implementing contamination measures such as
those provided in manuals and procedures concerning the handling of chlorine, water
quality, and sludge at existing water treatment facilities, and plans to take similar measuresin the Project.
(v) Natural Environment: For a portion of the segments in which water pipes are to be laid, theprocedures required by regulation are to be carried out under national procedure because
they pass through or near protected areas. Since the SRWSA will conduct the work withconsideration toward minimizing the impact on the natural environment and takemitigating measures, such as replanting of trees after completion of the work, it isenvisioned that unfavorable impact on the natural environment will be minimal.
(vi) Social Environment: The acquisition of approximately 4.5 hectares of land for the Projectwill be advanced in accordance with the internal procedures of Cambodia. Note that
non-voluntary transfer of residents is not anticipated to occur.
(vii) Others/Monitoring: SRWSA will monitor effluent water quality, noise/vibration, and thenatural environment during the construction period, as well as wastewater quality from thewater treatment plant, disposal conditions of waste products (sludge), the naturalenvironment, and other matters during the service period.
2) Promotion of Poverty Reduction: The installation, etc. of common water taps is planned to beimplemented in impoverished residential areas.
3) Promotion of Social Development: None in particular.
(8) Collaboration with Other Donors
Through the technical cooperation project, the Capacity Building for Water Supply System inCambodia Phase III (to be implemented over a five-year periods starting in FY2012), and others,
JICA plans to support the strengthening of organizational capacity among through related to watersupply projects in Cambodia, including the SRWSA.
(9) Other Important Issues
3/5None in particular.
4. Targeted Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicators)

IndicatorBaseline(Actual Baseline in2011)

Target (2020)[2 years after project completion]

No. of households connected towater supply

4,867

18,797

Water supply population

24,876

106,050

Turbidity (NTU)

0Less than 5

Water treatment plant operating
rate (%)-52.82) Internal Rates of Return
Based on the foregoing assumptions, the economic internal rate of return (EIRR) for the Project willbe 21.22%, and the financial internal rate of return (FIRR) will be 3.06%.
(i) Economic Internal Rate of Return (EIRR): [Costs] Project costs (construction costs,operation, maintenance, and management costs) (excluding tax);[Benefits] Reduction of water purchasing costs, reduction of disbursement to medical
institutions, tourism-related revenue [Project life] 40 years(ii) Financial Internal Rate of Return (FIRR): [Costs] Project costs (construction costs, operation,maintenance, and management costs, material update costs);[Benefits] Fee revenue [Project life] 40 years(2) Qualitative Effects
Improvement of the living environment for citizens of Siem Reap, preservation of the Angkor Watruins by switching the water source from the groundwater flowing under the ruins to surface water,and regional economic development focused on the tourism industry through improvement of theinvestment environment.
5. External Factors and Risk Control
None in particular.
6. Results of Evaluations and Lessons Learned from Past Projects(1) Results of Evaluations of Similar Past Projects
4/5Based on ex-post evaluations of past projects in the water supply field, it was learned that it isimportant to strengthen the capacity of the executing agency in order to realize sustainableeffects, because there is a possibility of inadequate realization of effects after project
implementation due to a lack of technical capabilities or similar issues at regional water supplyauthorities.
(2) Lessons for the Project
Viewing the above lesson in light of the technical capabilities, etc. of the executing agency for
the Project, JICA plans to support enhancement of technical capabilities through consulting
services and the dispatching, etc. of loan aid experts.
7. Plan for Future Evaluation(1) Indicators to be Used
1) Number of households connected to the water supply
2) Water supply population
3) Turbidity (NTU)
4) Water treatment plant operating rate (%)5) The internal rates of return EIRR (%) and FIRR (%)(2) Timing
Two years after project completion

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