Cambodia Emerges as a Rising Model for Public-Private Partnerships in Southeast Asia

The World Bank commends spectacular progress in the legal and institutional framework for PPPs — a strong signal for private investors as Phnom Penh targets high-income status by 2050.

In the corridors of Phnom Penh's Ministry of Economy and Finance, a piece of news is circulating with quiet pride: the World Bank has just recognized Cambodia among developing countries that have established a "comprehensive and well-developed" framework for public-private partnerships (PPPs).

This recognition, beyond its institutional validation, reflects a deep transformation in the business environment of a country long associated with regulatory instability.

Figures That Speak for Themselves

The Benchmarking Infrastructure Development report, published by the World Bank's Infrastructure Finance, PPPs & Guarantees (IPG) group, assesses the quality of regulatory frameworks in more than a hundred countries against international best practices in the preparation, procurement, and management of major PPP infrastructure projects.

For Cambodia, the data are striking. The project preparation score rose from 26 points in 2019–2022 to 39 points in 2025. The procurement score recorded one of the most notable improvements in the report: from 8 to 51 points. Project management improved from 76 to 79 points, while the unsolicited projects component — initiatives originating from the private sector — rose from 17 to 33 points, reflecting growing interest from international operators in a market long underexploited.

These results point to a structural shift that few observers would have anticipated even five years ago.

A Renovated Institutional Architecture

This performance rests on a significantly strengthened legal and institutional foundation built since 2021. The Law on Public-Private Partnerships, adopted that year following a multi-stakeholder consultation process, laid the groundwork for a modern framework of cooperation between the state and private investors, centered on efficiency, transparency, and accountability.

The system relies on the General Directorate of Public-Private Partnerships (GDPPP), under the supervision of the Ministry of Economy and Finance, which serves as secretariat to the Inter-Ministerial Committee for PPPs (IMC) — the central body responsible for project selection and approval. In parallel, the Royal Government established a Project Development Fund to finance feasibility studies and accelerate project maturation within line ministries.

This institutional architecture addresses a longstanding criticism: the absence of a single point of contact capable of giving foreign investors the clarity they need to commit long-term capital to often complex projects.

A Supportive but Strained Macroeconomic Context

The World Bank's recognition comes at a particular economic moment. After two decades of exceptional growth — Cambodia's GDP expanded at an average of 8.2% per year between 2000 and 2019, making it the fifth fastest-growing economy in the world — the Covid-19 shock triggered the country's first recession in 25 years in 2020 (-3.6%). Recovery has since taken hold, with growth estimated at 6% in 2024.

But the challenges remain considerable. The infrastructure deficit is one of the principal brakes on development: roads, energy, drinking water, digital connectivity — sectors where needs far exceed public financing capacity. Estimates point to an investment program of some $50 billion across 330 infrastructure projects in the coming years, notably in road and logistics. The port of Sihanoukville, the country's main maritime gateway, reached a record 1.3 million TEUs in 2025, with berth occupancy approaching saturation.

It is precisely in this context that PPPs take on their full strategic significance.

The Pentagonal Strategy as a Horizon

The World Bank's international recognition fits within a broader trajectory: the Pentagonal Strategy, the socio-economic roadmap launched by Prime Minister Hun Manet in August 2023 for the next twenty-five years. The stated objective is to elevate Cambodia to upper-middle-income status by 2030, and high-income status by 2050. Phase I (2024–2028) targets annual growth above 7% and a poverty rate below 10%.

PPPs occupy a central place within it, particularly across the five priority pillars identified by the government: human capital, economic diversification, private sector development, climate resilience, and the digital economy. The World Bank, in its Country Partnership Framework 2025–2029, has aligned its support program with these same priorities, with particular attention to basic education, competitiveness, and protection of vulnerable households.

International Experts Confident, With Reservations

World Bank experts express confidence in Cambodia's ability to maintain this momentum, noting that strengthening public-private cooperation could accelerate development in critical sectors: transport, energy, water supply, and other strategic infrastructure.

Yet some analysts urge caution. The qualitative leap measured by the Benchmarking Infrastructure Development report relates primarily to the quality of the regulatory framework, not to the actual volume of transactions concluded. Operational implementation — processing timelines, dispute arbitration, administrative capacity within line ministries — remains a challenge in a country where the rule of law is still a work in progress.

The Asian Development Bank (ADB), in its Country Partnership Strategy for 2024–2028, notes that "the lack of private sector-led economic diversification" remains one of Cambodia's principal structural vulnerabilities. It further highlights that exposure to climate shocks could shave nearly 10% off GDP by 2050 if adaptation measures are not taken in time.

A Signal for Investors

Even so, the World Bank's recognition constitutes a strong signal for the international investment community. By improving its scores in areas as concrete as procurement — from 8 to 51 points, nearly doubling the achievable maximum — Cambodia sends a clear message: the rules of the game exist, they are legible, and their application is advancing.

The country is part of a broader regional movement. ASEAN as a whole is striving to attract private capital to close an infrastructure deficit estimated at several trillion dollars by 2030. In this competition, countries able to demonstrate a solid and transparent PPP framework hold a decisive comparative advantage.

For Phnom Penh, the challenge now is to convert the opportunity: to translate the quality of the institutional framework into projects that are effectively financed, built, and delivered. The economic history of the region is full of examples of well-designed reforms that never found takers for lack of execution. Cambodia, for its part, appears to have understood that between legislative texts and open construction sites, the road ahead remains long.

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Sources : Banque mondiale, Benchmarking Infrastructure Development (2025) ; World Bank Country Partnership Framework Cambodia FY2025–2029 (octobre 2024) ; ADB Country Partnership Strategy Cambodia 2024–2028 ; Gouvernement royal du Cambodge, Stratégie Pentagonale Phase I (2023) ; Délégués commerciaux du Canada, Le marché des infrastructures au Cambodge (2023).