China Backs Over $1B Funan Techo Water Project with Concessional Loan

BEIJING, June 30, 2026 (KPT) – China has pledged concessional financing to support Cambodia’s more than $1 billion Funan Techo Integrated Water Resources Management Project, as the two countries agreed to fast-track several strategic infrastructure schemes during high-level talks in Beijing, officials said Tuesday.

The commitment was announced at a meeting between Cambodian Deputy Prime Minister Sun Chanthol, First Vice-Chairman of the Council for the Development of Cambodia (CDC), and Chen Xiaodong, Chairman of the China International Development Cooperation Agency (CIDCA).

Leading a senior Cambodian delegation, Chanthol met CIDCA officials to review progress on major projects covered under existing bilateral memorandums of understanding, aimed at strengthening Cambodia’s transport and water infrastructure while supporting long-term economic growth.

CIDCA confirmed its backing for construction along the alignment of the Funan Techo project through a concessional loan. Cambodia welcomed the pledge and urged China to expedite financial approval to accelerate implementation.

In April, Cambodia began building the second section of the canal, a $1.4 billion development linking the Mekong River system to the sea. 

The 151.6-kilometre stretch runs from Prek Po in Kandal province to Kep on the coast, following the inauguration of the first 26-kilometre section in August 2024. Once completed, the canal will span 172.6 kilometres, tracing existing waterways and historic canal paths dating back to the Funan era.

Beyond the Funan Techo project, both sides reviewed three other priority initiatives: rehabilitation of a 20-kilometre section of National Road No. 3 in Veal Renh, upgrading of National Road No. 7 linking Kratie and Stung Treng provinces, and the Sihanoukville Wastewater Treatment Project.

The Cambodian delegation included Public Works and Transport Minister Peng Ponea, Ambassador to China Soeung Rathchavy, and senior officials from the ministries of Public Works and Transport, Economy and Finance, and the CDC.

According to the CDC, discussions focused on accelerating strategic projects to improve connectivity, strengthen water resource management, enhance environmental infrastructure and promote sustainable growth.