Cambodia: World Bank Approves $36.25 Million Grant for Commune/Sangkat Development and Improved Local Governance

Contacts:
In Bangkok: Pichaya Fitts
Email: pfitts@worldbank.org
In Phnom Penh: Bou Saroeun
Email: sbou@worldbank.org
In Washington: Mohamad Al-Arief at
(202) 458-5964
Email: malarief@worldbank.org.

Phnom Penh, July 26 — Today, the World Bank’s Board of Executive Directors reaffirmed its support for Cambodia’s decentralization to the communes/sangkats and related local governance reforms, by approving a $36.25 million grant in additional financing for the Rural Investment and Local Governance Project (RILGP), as a supplement to the original RILGP which provided $22 million during 2003 - 2007.

The additional financing aims to expand the project support from the current 15 to 23 provinces, provide continuing financing for an additional three years from 2007 – 2009 to the intergovernmental fiscal transfer, the Commune/Sangkat Fund, and facilitate an accelerated increase in the amount of the overall intergovernmental fiscal transfer and related commune allocations.

The World Bank’s Country Assistance Strategy for Cambodia 2005 - 2008, endorsed by the Board in May 2005, recognizes governance issues as the primary obstacle to growth, poverty reduction, and aid effectiveness, and supports decentralization as a means to improve local governance and accountability. Through the RILGP – Additional Financing, the Bank will continue to support decentralized and participatory local governance systems and provision of priority public goods and infrastructure at the commune/sangkat level.

Mr. Ian Porter, World Bank Country Director, said, “While RILGP and RILGP-Additional Financing fund specific investments at the commune level, the institutional arrangements, procedures and funds flow are integrated as much as possible into the government’s own structures and systems. This has helped to build capacity directly within government institutions, strengthen government systems, and thus create a strong basis for sustainability and scaling-up of development impacts.”

H.E. Sar Kheng, Deputy Prime Minister and Mister of Interior said, “The Royal Government of Cambodia very much welcomes and appreciates the support of the World Bank to rural development and poverty reduction efforts through the provision of priority infrastructure and public goods at the commune level, and strengthening of the decentralized participatory local governance system, under the Royal Government’s Strategic Framework for Decentralization and Deconcentration Reforms. In particular, the Bank’s support of Commune/Sangkat Fund through RILGP Additional Financing is very important, since it provides ongoing support to the Royal Government’s own intergovernmental fiscal transfer system, and will allow an increase in allocations of development funding to the communes over the coming 3 years.”

Ms. Nisha Agrawal, Country Manager for Cambodia said that the RILGP-Additional Financing is also aiding in harmonization and alignment of development partner support. “The Royal Government will use part of the additional grant to support development of a National Decentralization and Deconcentration Program, which will elaborate the implementation details for the National Strategic Framework for Decentlization and Deconcentration Reforms and will help to provide a better foundation for coordinated donor support in future,” she said.

The Bank Board’s approval of the additional financing for RILG is the first for Cambodia under the Bank’s policy, adopted on May 19, 2005, which enables the Bank to provide additional financing in the context of ongoing, well-performing projects, such as RILGP, to scale up the project’s impact and development effectiveness. This approval follows the recent Board approval of a $15 million grant for the Poverty Reduction Growth Operation (PRGO).

For more information on the World Bank and its work in Cambodia, please visit:

http://www.worldbank.org/kh