Ex-Ante Evaluation (for Japanese ODA Loan)
Southeast Asia Division 2, Southeast Asia and Pacific Department, JICA
1. Basic information
Country: The Kingdom of Cambodia (hereinafter, Cambodia)
Project: COVID-19 Crisis Response Emergency Support Loan
L/A: November 10, 2020
2. Background and necessity of the project(1) Current Circumstances and Issues of Cambodia’s Response to COVID-19and Prioritized Program
As COVID-19 is spreading around the world, the first infected patient in
Cambodia was found in January 2020 and the total number of infected patientsis 295 (number of deaths: 0, recovered: 288) as of November 8. On April 29,
2020, the Cambodian government promulgated a law that serves as the basis todeclare a state of emergency that makes it possible to restrict movement,gathering, and working. However, the government considers that it is notnecessary to declare a state of emergency because infection in the country isunder control at this point. Meanwhile, infected patients have been found mainly
among returnees from overseas. The government is on the alert for the second
wave of infection in the future (the World Health Organization (WHO) warned theCambodian government of a high risk of the second wave in the country) andhas been working to upgrade the medical system.
As explained above, the number of infected patients in Cambodia is kept
rather small while the influence on the economy is devastating. The economic
growth rate of Cambodia had been maintained at 7.6% on average from 1995 to2019. The World Bank predicted that the rate would decrease to minus 2.0 tominus 2.9% in 2020 due to influence on main industries, such as garment, tourist,and construction industries (the three sectors account for 43.2% of the GDP in2019 and the garment industry accounts for 73.9% of the export).
In the garment industry in Cambodia, in particular, the operation is stopped atapproximately 400 factories among over 1,100 factories as of July 2020 because
the demand in Europe and the US dropped due to COVID-19. That have directlyaffected approximately 150,000 people or more and have indirectly affected
approximately 2 million people when their families are included. In addition, inthe second quarter of 2020, the number of travelers from overseas decreased by
98.1% as compared with the same period of the previous year. The year-aroundincome of the tourist sector is expected to decrease by 90% in 2020. Under suchcircumstances, in the tourist sector, approximately 3,000 companies have closed
the businesses so far, which has made approximately 45,000 people
unemployed (Cambodian Ministry of Tourism, 2020). Furthermore, there isanother forecast that 1.76 million or more people will face a risk of losing theirjobs in an economic downturn due to spreading COVID-19. The Cambodian
government lowered the poverty rate to 13.5% in 2014 from 47.8% in 2007.
However, according to the World Bank, if the government fails to properly treat
the influence of COVID-19 on the poor, approximately 960,000 people (when thegrowth rate is minus 1.0%) to approximately 1.13 million people (when thegrowth rate is minus 2.9%) may additionally be poor (World Bank, 2020).
Cambodia has close economical relationship with Japan, for example, Japanaccounts for 8.3% of the Cambodia’s export and 3.2% of the import (2018).
Therefore, there is concern that the spreading COVID-19 may seriously affect
388 Japanese companies operating in Cambodia (2018).
The Cambodian government formulated emergency countermeasures against
COVID-19 including economic and social stabilization measures led by Ministryof Economy and Finance (MEF). The calculated provisional amount required toimplement the measures is approximately 2 billion dollars (approximately 7.5%of the GDP in 2019). Although the Cambodian government determined several
measures, such as postponing new public works projects in the country andreducing the travelling expenses of government workers, an urgent task is tosecure funds necessary for tackling COVID-19. In addition, in the initial 2020
budget, the expected fiscal balance is 1.7% to the GDP, being in the black for 3
consecutive years. However, the financial deficit is expected to increase tominus 9.0% to the GDP (approximately 2.4 billion dollars) due to sharp decreasein the tax revenue and remarkable increase of the expenditure related to theresponse to COVID-19 (World Bank, 2020). Under such circumstances, theCambodian government is planning to borrow total approximately 7.7 hundred
million dollars in 2020 from development partners, including financial supportfrom ADB, World Bank, and other organizations. The Cambodian government
asked the Japanese government for a yen loan of 3 hundred million in May.
Considering the need for funds, Japan provides financial support to theCambodian government that works to implement the afore-mentioned economic
and social stabilization measures to respond to COVID-19.
(2) Japan’s and JICA’s Cooperation Policies for the Response to COVID-19
The Japanese government decided to provide support for the following

activities in the sectors specified in the Development Cooperation Policies forCambodia (July 2017): to the key sector “industrial promotion support,” activities
for improving the distribution network for both hardware and software, smoothing
trade, and upgrading the investment environment; to another key sector“realization of sustainable society through enhancing the governance,” activities
for legislation and administrative reform; and to another key sector “improvementof living quality,” activities in the health/medical treatment and social securitysectors. In addition, the Japanese government also announced at the ASEAN+3
special summit meeting held on April 14, 2020 to support the three items listed
below considering the influence of COVID-19 on the ASEAN countries: (i)Enhancement of the ability to cope with the infectious disease, (ii) setting up of
an ASEAN infectious disease center, and (iii) enhancement of the economic
resilience. Furthermore, since this project supports the response to worldwide
influence of COVID-19, it also contributes to securing the peace and stability in“Free and Open Indo-Pacific.” Moreover, this project provides financial support
for maintaining and activating economic and social activities, protecting thesocially disadvantaged, and improving the health system. Therefore, this project
may contribute to SDGs Goal 1 (End poverty in all its forms everywhere), SDGs
Goal 3 (Ensure healthy lives and promote well-being for all at all ages), andSDGs Goal 8 (Promote sustained, inclusive and sustainable economic growth,
full and productive employment and decent work for all).
(3) Response of other Development Partners
The ADB Board of Directors has approved Countercyclical Support Facility
COVID-19 Pandemic Response Option (CPRO) costing 20 billion dollars
worldwide. It approved COVID-19 Active Response and Expenditure Support(CARES) of 250 million dollars in July as financing for Cambodia. Agence
Française de Développement (AFD) is planning to provide joint financing for
CARES (40 million dollars).
The World Bank Board of Directors approved in February 2020 an emergency
grant for enhancing the capability to tackle COVID-19 (14 million dollars). It
approved an emergency loan for support the response to COVID-19 (20 milliondollars) in April and an additional loan to the health and medical treatment sector(15 million dollars) in May. The World Bank is planning to provide financial
support of 150 million dollars in the future. In April, the EU announced a grant of
66 million dollars to support the response to COVID-19 and in June, itannounced financial support of 483 million dollars including grants and loans asTeam Europe including member countries (among the amount, approximately
120 million dollars are for the EU alone (all of them is donation). The rest is forthe member countries. The financial support targets include new projects andchanges of the existing projects’ purposes for which the funds are spent).
China sent a medical expert team to Cambodia, which was the first among theSoutheast Asian countries. The Communist Party, Shanghai Government,
Guangxi Zhuang Autonomous Region, and various companies (e.g., Huawei)
delivered masks, test kits, and other medical goods (500,000 dollars in total). In
September 2020, the Asian Infrastructure Investment Bank (AIIB) approved
emergency financing of 65 million dollars under its COVID-19 Crisis Measure
Facility for sustaining infrastructures in rural areas and enhancing the resilience,and to the water and sanitation sector.
3. Outline of the project(1) Purpose of the ProjectThis project is to provide financial support to the Cambodian government toimplement countermeasures against COVID-19, such as maintaining andactivating economic and social activities, protecting the socially vulnerable
people, and improving the health system in Cambodia. These measures in turncontribute to stabilizing the economy and society of Cambodia and encouraging
efforts for sustainable development.
(2) Project Site/Target Area
Whole of Cambodia(3) Details of the ProjectThis project is to provide financial support to the Cambodian government that
determines and implements the following programs as measures to stabilize theeconomy and society that are affected by COVID-19. The loan is provided
immediately after the Cambodian government has made an application after theL/A has come into effect and the fund will be included into the general finances ofCambodia. After the loan has been extended, the progress of the crisis
measures will be monitored by the system to be mentioned later.
ProgramMain contents

Necessaryamount(milliondollars)(A) Economic recovery Wage subsidy for workers, financing to small and950

programmedium companies, reduction of the rate of thewithholding tax for loans from banks in and outside
the country, educational training, employmentservices, reduction of the corporate tax, grace tothe payment of income tax, exemption of all taxes
for the tourist industry, exemption of sales tax forthe aviation industry, setting up of funds such as acredit guarantee fund and agricultural regional
development bank, lowering of interest rates,
extension of pay-back periods, improvement ofphysical distribution, etc.

(B) Social
programprotection Public support for poor households and sociallyvulnerable people, cash for unemployed people
and migrant workers returned from overseas,

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exemption of the payment of premiums of theNational Social Security Fund, etc.
(C) Health and medical Purchase of materials and equipment fortreatment programprotection, testing, and medical treatment,enhancement of the capability of testing, research,60

and medical facilities, etc.
(D) Reservation for the afore-mentioned measures in preparation for a case inwhich the influence of COVID-19 still remains in September 2020 and after.

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Total2,000(4) Estimated Program Cost (Loan Amount)Loan amount: 25 billion yen(5) Project Period
The formulation and start of the crisis response programs have been
confirmed as mentioned previously, so the project completes when the loan isextended (planned in December 2020).
(6) Program Implementation Structure1) Borrower: Cambodian government (the Royal Government of Cambodia)
2) Guarantor: None
3) Project implementation organization: Ministry of Economy and Finance(7) Cooperation and Sharing of Roles with other Development Partners
1) Support activities by the Japanese government
In the technical cooperation project “Project for improving continuum of carewith focus on intrapartum and neonatal care,” the Japanese government isplanning to provide infrared thermographs for the response to COVID-19 as partof technical cooperation. Combined effects are expected thanks to enhanced
capability for testing and handling COVID-19 at target facilities.
2) Support activities by other development partners
This project is joint financing with ADB. AFD is also planning to participate in
the joint financing. The progress will be monitored in cooperation with ADB andother organization(s).
(8) Environmental and Social Considerations, Cross-cutting Issues, and GenderClassification
1) Environmental and Social Considerations(i) Category: C(ii) Reason for the classification: Because the unfavorable influence of
this project on the environment is judged minimum based on the JICA
Guidelines for Environmental and Social Considerations (promulgated inApril 2010).
2) Cross-cutting Issues(i) Measures and considerations for poverty: The Cambodian
government’s crisis response programs include direct support to the poorand socially vulnerable (children under 5, elderly people of 60 years andover, handicapped people, and HIV infected patients) who are affected by
COVID-19.
(ii) Considerations for handicapped people: The afore-mentioned sociallyvulnerable includes handicapped people.
3) Gender classification: GI (S) Gender informed (Significant)[Activity details/reasons of the classification] Beneficiaries of the public
assistance for the poor in the crisis response programs by the Cambodian
government include women to a certain extent or more. A certain number ormore of the entrepreneurs of small and medium companies that obtain thefinancing is female. In addition, the ratio of male and female beneficiaries will
also be monitored.
(9) Other special note: The measures to be implemented in the crisis responseby the Cambodian government may contribute to activities of Japanesecompanies operating in Cambodia and recovery and maintaining of their supply
chains.
4. Effects of the project(1) Quantitative effects
1) Outcome (operation and effectiveness indexes)
Index*1
Cambodia’s preparedness capacity,
assessed by the operational
readiness index (%)*2
Ratio of the poor and vulnerable who
received cash grants through theIDPoor database and among which,Standard value

Target value (targetyear and month)4252(2018)(December 2021)(January 2020)

80 (whole of the poorand vulnerable)
50 (female

the ratio of female beneficiaries (%)*3

beneficiaries amongthe figure above)(December 2020)

Ratio of SMEs that received working-70 (whole of small

capital support are still in business,of which the ratio of female
entrepreneurs (%)(January 2020)and mediumcompanies)
26 (female
entrepreneurs
among the figureabove)(June 2021)
Note 1: For the operation and effectiveness indexes, those used in ADB
CARES are used (ADB is the counterpart in this joint financing project).
Note 2: WHO evaluations showing the ability of various countries to quickly
response to public hygiene events. The WHO analyzed annual reports on
international health guidelines of 182 countries and determined 18 indexes
for evaluation.
Note 3: IDPoor is a program carried out in the whole country by support fromthe World Bank and Australia (support of medical, food, and funeral
expenses and other expenses to the poor). The number of registered people
is approximately 2,400,000 as of January 2020.
(2) Qualitative Effects
This project contributes to stabilizing the Cambodian economy and society,continuance of Japanese companies’ businesses, recovery and maintaining of
their supply chains (the effects will be comprehensively checked using thenumber of full members of the Japanese Business Association of Cambodia,
amounts of export and import, cargo volume, and other items as indexes).
(3) Internal rate of return: No internal rate of return is calculated since this project

is a program-type loan.
5. Precondition(s) and external condition(s)(1) Precondition(s): None
(2) External condition(s): The worldwide spread of COVID-19 is properly
controlled and the situation returns to normal quickly.
6. Lesson(s) from similar project(s) in the past and application to thisproject
The Ex-post evaluations of the emergency financial support loans for three
countries in Southeast Asia (“Emergency financial support loan” for Philippine,“Climate change program loan (II) (support for economic stimulative measures)”for Indonesia, and “The eighth poverty reduction support loan (support foreconomic stimulative measures)” for Vietnam) show a lesson below: When one
purpose of emergency financial support is to provide funds promptly to allow
quicker response to crises, the time when the support is provided is very
important to enhance the effects; therefore, it is desirable to simplify theprocedure to provide support as much as possible and make the scheme
adaptive and flexible.
Considering the afore-mentioned lesson, this project is carried out as joint
financing with the ADB’s emergency financial support. Therefore, no policy
matrix is formulated and this project’s support targets include various measuresthat the Cambodian government determines and implements (e.g., maintainingand activating economic and social activities and protecting the sociallydisadvantaged). This project can provide a fund quickly by establishing amonitoring system to check the progress.
7. Evaluation results
This project matches the development subjects and policies of the Royal
government of Cambodia and the cooperation policies of the government ofJapanese and JICA. In addition, this project provides financial support tosuppress the spread of the COVID-19, maintain and activate economic andsocial activities of affected people, protect the socially disadvantaged, andimprove the health system. Therefore, this project may contribute to the following
SDGs Goals: SDGs Goal 1 (End poverty in all its forms everywhere), SDGs Goal
3 (Ensure healthy lives and promote well-being for all at all ages), SDGs Goal 5(Achieve gender equality and empower all women and girls), SDGs Goal 8(Promote sustained, inclusive and sustainable economic growth, full andproductive employment and decent work for all), SDGs Goal 10 (Reduceinequality within and among countries), and SDGs Goal 17 (Strengthen themeans of implementation and revitalize the Global Partnership for SustainableDevelopment). From the reasons listed above, it is highly necessary to support
the implementation of the programs.
8. Future evaluation schedule(1) Indexes to be used for future evaluation(s)Same as those in 4.
(2) Future evaluation schedule
Ex-post evaluation will be made in 2 years from the project completion.
End