For Yen Loan

Ex-ante Project Evaluation
August 29, 2011
Southeast Asia Division 4Southeast Asia and Pacific Department
Japan International Cooperation Agency
1. Name of project (country name)Country:

Kingdom of Cambodia

Name of project:West Tonle Sap Irrigation and Drainage Rehabilitation and Improvement
Project

L/A signing date:August 23, 2011

Loan amount:

4,269,000,000 yen

Borrower:

The Royal Government of Cambodia

2. Background and need for project(1) Progress of development (current status) of and issues concerning the irrigation sector inCambodia
Agriculture forms the backbone of Cambodia’s economy. Agriculture accounts for more than
30% of GDP and employs 70% of the nation’s working population. More than 80% of Cambodia’spopulation (and more than 90% of its impoverished population) lives in rural areas. Accordingly,
the Cambodian government positions agricultural and rural development as a priority issue in its
effort to achieve poverty reduction and economic growth.

However, many of the irrigation

facilities currently existing in Cambodia were constructed during the period of civil war during
the latter half of the 1970s1, and consequently a high percentage of these facilities do not function
adequately due to problems with their design, construction or old age.

Thus, of theapproximately 2.25 million hectares of paddy field area in Cambodia (2008), only approximately
580,000 hectares, or 26% of paddy field area, are actually irrigated.

Agriculture, andparticularly rice cultivation, is the key industry in the area around Tonle Sap Lake, which is thetarget region of this Project. However, despite having high water resource potential, farmers inthis region depend on rainwater because irrigation facilities there do not function. Productivity
Cambodia suffered from civil war and political upheaval for 20 years following a coup d’état in 1970. During
the time Cambodia was ruled by forces aligned with Pol Pot, who seized control of the government in 1975,
many canals and small-scale dams were built by Cambodians pressed into forced labor. These facilities wereconstructed with the political goal of dramatically increasing rice production based on radical Communist
ideals.
1

in the area remains low as a result.

Moreover, the region is vulnerable to changes inprecipitation amounts and patterns arising from climate change and other factors. Given theseconditions, JICA formulated master plans for 21 regions as part of a development study titled“Basin-wide Basic Irrigation and Drainage Master Plan Study” (February 2007 to February 2009),
which was implemented based on a request by the Royal Government of Cambodia to promote
efficient use of water resources in four river basins having high development priority. This
Project will upgrade irrigation facilities in six regions which were identified as priority projects.
(2) Cambodia’s development policy and positioning of this Project in the irrigation sector
In its National Strategic Development Plan (2009 - 2013), the Cambodian government
established higher agricultural production as a key goal in reducing poverty and achieving
sustainable economic growth. Moreover, its sector development policy lays out a path for raising
agricultural productivity and expanding irrigated area by upgrading and constructing irrigation
facilities. Furthermore, the Ministry of Water Resources and Meteorology’s “action plan fordevelopment water resources and meteorological management” advocates promoting water
resources management and the development of irrigation facilities.
(3) Japan and JICA’s aid policy and achievements in the irrigation sector
Japan’s Country Assistance Strategy for Cambodia establishes agricultural and ruraldevelopment as a priority development issue. This strategy seeks to support the development ofirrigation facilities, improvement of water management systems, and nurturing of water users’
groups in order to raise agricultural productivity.

Based on this, JICA has established a“program for development and management of water resources and irrigation” for the purpose ofpromoting agricultural and rural development as a means of strengthening Cambodia’s economicfoundation. This Project will be implemented as part of this program. JICA has supported
Cambodia’s irrigation sector by providing continuous technical cooperation since the mid-1990s
and implementing two grant aid projects.
(4) Responses of other aid organizations
The Asian Development Bank (hereafter “ADB”), French Development Agency (hereafter “AFD”),
South Korea, China, and others are supporting the upgrade and maintenance of irrigation
facilities in various regions, particularly in the region around the Tonle Sap Lake. The United
Nations Food and Agriculture Organization (hereafter “FAO”), Australia, and others areproviding assistance in the farming sector, where assistance in the agricultural field is being
coordinated through technical working groups concerned with agriculture and water.

(5) Need for the projectRaising productivity in rural regions and improving the livelihood of farmers are essential topoverty reduction in Cambodia. Moreover, bringing stability to water supply by developing
irrigation facilities has extremely high urgency as a countermeasure to changes in precipitation
amounts and patterns that are caused by climate change. There are still widespread rural areasthat lack irrigation facilities. Thus, given the achievements of past cooperation involving grant
aid and technical cooperation, it is thought that engaging in whole-area development using yenloans will be useful in effectively promoting irrigation facility development at the water-basin
level for regions having high rice cultivation potential. Accordingly, JICA’s support for thisProject has high necessity and validity.
3. Project summary(1) Project purpose
Targeting impoverished rural areas in six regions of three provinces on the western side of theTonle Sap, the Project will raise agricultural production in the targeted areas and, by extension,
contribute to improved livelihood among the areas’ farmers by upgrading and developing
irrigation and drainage facilities and establishing, strengthening farmer water users’ groups, andproviding agricultural extension techniques.
(2) Name of project site and targeted regions
Battambang, Pursat, and Kompong Chhnang Provinces(3) Project summary (including procurement methods): Development of irrigation and drainage
facilities in six regions (total of 12, 760 hectares)
1) Upgrade and new construction of irrigation facilities (weirs and main/secondary/tertiarychannels) (international competitive bidding/local competitive bidding)2) Soft component (support for water users’ groups, supply of materials for agricultural extension
services, etc.) (local competitive bidding, etc.)
3) Consulting service (detailed design [D/D], bidding assistance, construction supervision)(international competitive bidding)(4) Total project cost
4,932,000,000 yen (of which, amount covered by yen loan: 4,269,000,000 yen)(5) Project implementation schedule (cooperation period)
Planned for the period between August 2011 and September 2017 (70 months). The Project will
be considered completed when facilities begin service (July 2016)(6) Project implementation system
1) Borrower: The Royal Government of Cambodia
2) Guarantor: None
3) Organization implementing Project: Ministry of Water Resources and Meteorology(MOWRAM)
4) System for operations, administration, maintenance, and management: MOWRAM andDepartment of Water Resources and Meteorology will operate and maintain weirs and mainand secondary channels; water users’ groups will operate and maintain tertiary channels.
(7) Environmental and social consideration, poverty reduction, social development
1) Environmental and social considerationsa) Category classification: Bb) Rationale for category classification: It is deemed that the Project does not apply to any ofthe large-scale projects in the agricultural sector that are listed in “Japan Bank forInternational Cooperation Guidelines for Confirmation of Environmental and SocialConsiderations” (established in April 2002) and that its adverse impact on theenvironment will not be significant.

Moreover, it is deemed that the Project is not

relevant to the sensitive characteristics and areas that are mentioned in these guidelines.
Thus, the Project is classified as Category B.
c) Environmental permits: Under the laws of Cambodia, there is no requirement to prepare
an Environmental Impact Assessment (EIA) report for the Project.

(The size of thetargeted regions falls below the size that requires an EIA [5,000 hectares].)d) Measures for pollution control: No particular impact is anticipated in terms of waterpollution or soil contamination caused by fertilizers and agrochemicals following the startof the Project, as fertilizers and agrochemicals will be used and disposed of appropriately
through awareness-raising activities that include farming guidance for farmers.
e) Natural environment: The Project site is not located in a sensitive area, such as a nationalpark, or in the surroundings of a sensitive area, and thus it is anticipated that its adverse
impact on the natural environment will be minimal. In addition, fishways will be built in
the weirs based on consideration on the Project’s impact on aquatic organisms.
f) Social environment: Under the Project plan, approximately six households will berelocated and approximately 208 ha of land will be acquisitioned. Said relocation andland acquisition will proceed in accordance with procedures in Cambodia.
g) Other matters and monitoring: MOWRAM will monitor land acquisition, resident
relocation, water quality, soil quality, and other matters associated with the Project.
2) Promotion of poverty reduction: The Project site is located in an impoverished region. The
Project will promote poverty reduction by providing farming guidance to farmers, including
impoverished farmers, among other activities.
3) Promotion of social development (gender perspective, measures addressing infectious diseases
such as AIDS, participatory development, consideration of handicapped people, etc.); The
Project will involve resident-participatory maintenance and management of irrigation
facilities by organizing water users’ groups.
(8) Coordination with other schemes, donors, etc.
Technical cooperation projects titled the “Improvement of Agricultural River Basin Managementand Development Project” (September 2009 to September 2014) and “Agricultural Productivity
Promotion Project in West Tonle Sap” (October 2010 to March 2015), which involve establishingmodel districts within the Project’s targeted regions and activities to improve irrigation
management capabilities and farming practices, are currently underway.

The Project will

support the executing agency’s work to expand the results of these technical cooperation projects
to all regions targeted by the Project.
(9) Other notes: The Project will contribute to efforts to adapt to climate change by improving
responses to changes in precipitation amounts and patterns through the upgrade anddevelopment of irrigation facilities.
4. Project effects(1) Quantitative effect1)

Operation and effect indicators
Indicator

Irrigated area (hectares)
Rice planting area (hectares)

Standard value(2009 actual value)

Target value (2019)(3 years after Project iscompleted)

760

12,76014,26016,800Number of farmer water users’’

052

22,00054,000

1.5

3.2

groups (FWUG)
Rice production (tons/year)
Rice yield (tons/hectares)

2) Internal rate of return: Based on the assumptions below, the economic internal rate of return(EIRR) is calculated at 14.7%.
Cost: Project cost (excluding tax), operation and maintenance cost
Benefit: Increased agricultural production due to irrigation
Project life: 30 years(2) Qualitative effect: Stabilized supply of irrigation water, improved farmer livelihood
5. External conditions and risk control
None in particular
6. Evaluation results for similar projects in the past and lessons for this Project
It is known from ex-post evaluations of previous similar projects in the irrigation field that
post-completion maintenance and management have a significant influence on the realization ofproject effects.

Moreover, it has been shown that project formulation and implementation

management must be conducted with consideration for establishing an operation andmanagement system. Activities implemented under this Project will support the organizationand functional reinforcement of FWUGs utilizing the model district that the “Improvement ofAgricultural River Basin Management and Development Project” (technical cooperation project)
set up in a portion of the targeted regions and aim to support the realization of Project effects
through collaboration with technical cooperation.
7. Future evaluation plans(1) Indicators to be used in future evaluation
1) Irrigated area (hectares)
2) Planted area (hectares)
3) Number of FWUGs established4) Rice production (ton/year)5) Rice yield (ton/hectares)
6) Internal rate of return: EIRR (%)(2) Timing of future evaluation

Three years after Project completion