A nearly $27 million loan for the flagship Funan Techo Canal is included in the draft 2026 national budget now before the National Assembly and Senate, a CamboJA News review found.
The loan, directed to Cambodian firms in the nearly $1.2 billion joint-venture project, is the most recent financing details to surface. The canal is structured with Cambodian investors reportedly holding 51% and Chinese partners 49%, after the government shifted from an earlier position that Beijing would fund the entire project.
The national development project, officially called the Tonle Bassac Navigation Road and Logistics System, will link the Mekong River to the Gulf of Thailand and reduce Cambodia’s shipping reliance on its neighbor Vietnam. The canal broke ground nearly a year ago, though visible progress has been limited, and it has faced scrutiny over potential environmental impacts and scant updates on compensation for displaced residents.
In October, the Council for the Development of Cambodia (CDC) included Funan Techo Canal in its report on registered investment projects, which totaled about $1.4 billion that month, even though only the $26.8 million loan has been formally allocated. Chinese investors drove roughly 49% of the inflows, with domestic partners close behind at around 48%.
The loan, slated for state-owned Phnom Penh Autonomous Port (PPAP) and Sihanoukville Autonomous Port (PAS), falls under the state credit framework, requiring that financing align with national strategic priorities and be managed within government fiscal and economic policy.
Hoeurn Samnieng, Deputy Secretary-General of the CDC, declined to comment when asked about the remaining funds Cambodia is expected to contribute to the project, referring questions instead to Phan Rim, spokesperson for the Ministry of Public Works and Transport.
Phan Rim also declined to provide details on additional financing or compensation for displaced residents, directing inquiries to the Ministry of Economy and Finance, but said construction is expected to start in late November or early December.
Meas Sok Sensan, spokesperson for the Ministry of Economy and Finance, said the compensation process has begun, though he did not provide further details. He also clarified that the loan is for the first phase of the project.
The $1.156 billion canal, earmarked for completion by 2028, would see Cambodia finance just over half of the project, or roughly $590 million. That figure represents about 5.8% of the draft 2026 national budget.
The sizable investment has previously raised concerns over potentially slim returns.
PPAP and PAS, both publicly listed, have reportedly been tight-lipped with shareholders about their involvement in the project, prompting some investors to question the canal’s return potential under a build-operate-transfer model.
