Validation Report

Reference Number: FRV: CAM 2014-08

August 2014

Cambodia: Country Partnership Strategy 20112013

Final Review Validation

This document is being disclosed to the public in accordance with ADB's Public Communications Policy 2011.

Independent Evaluation Department

CURRENCY EQUIVALENTS
(as of 5 May 2014)
Currency Unit
KR1.00
$1.00

=
=

Riel/s (KR)
$0.00025
KR 4,060

ABBREVIATIONS
ADB
ADF
ASEAN
ASR
CPS
CPSFR
DMF
EIRR
ESDP
FSP
GDP
GMS
IED
IEM
MFI
NAA
NBC
NGO
NSDP
O&M
PCR
PFM
PSM
SRC
TA
TVET

Asian Development Bank

Asian Development Fund
Association of Southeast Asian Nations
assessments, strategies, and roadmaps
country partnership strategy
country partnership strategy final review
design and monitoring framework
economic internal rate of return
Education Sector Development Program
Financial Sector Program
gross domestic product
Greater Mekong Subregion
Independent Evaluation Department
independent evaluation mission
multilateral financial institution
National Audit Authority
National Bank of Cambodia
nongovernment organization
National Strategic Development Plan
operation and maintenance
project completion report
public financial management
public sector management
School Resource Center
technical assistance
technical and vocational education and training

NOTES
(i)

In this report, $ refers to US dollars.

(ii)

For an explanation of rating descriptions used in ADB

evaluation reports, see: ADB. 2006. Guidelines for Preparing
Performance Evaluation Reports for Public Sector Operations.
Manila.

Key Words
asian development bank, country partnership strategy, development impacts, evaluation, final
review, independent evaluation department, lessons, cambodia, recommendations, validation

Director General
Director

V. Thomas, Director General, Independent Evaluation Department (IED)

B. Finlayson, Director, Independent Evaluation Division 2, IED

Team leader
Team members

E. Kwon, Principal Evaluation Specialist, IED

F. De Guzman, Evaluation Officer, IED
M. Fortu, Senior Evaluation Assistant, IED
Independent Evaluation Department, VR-15

In preparing any evaluation report, or by making any designation of or reference to a particular

territory or geographic area in this document, the Independent Evaluation Department does not
intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS
Page
EXECUTIVE SUMMARY

I.

BACKGROUND INFORMATION
A.
Validation Purposes and Procedures
B.
Country Context and Government Development Plans
C.
Country Partnership Strategy Priorities and Development Partner Roles

1
1
4
7

II.

VALIDATION OF THE COUNTRY PARTNERSHIP STRATEGY FINAL REVIEW

A.
Strategic Positioning
B.
Program Relevance
C.
Effectiveness
D.
Efficiency
E.
Sustainability
F.
Development Impacts
G.
ADB and Borrower Performance
H.
Overall Assessment
I.
Lessons, Issues, and Recommendations

7
8
11
14
23
26
30
37
38
39

III.

ASSESSMENT OF THE QUALITY OF THE FINAL REVIEW

42

APPENDIX (List of linked documents)

1.
2.
3.
4.

43

Country Partnership Strategy Final Review: Cambodia, 20112013

Country Economic Indicators
ADB Approved Loans, Grants, and Nonsovereign Investment Facilities to Cambodia
ADB Approved Technical Assistance to Cambodia

The guidelines formally adopted by the Independent Evaluation Department on avoiding conflict
of interest in its independent evaluations were observed in the preparation of this report. G.
Ferrazzi and S. S. Dy provided consultant inputs and the peer reviewers were Marco Gatti and
Toshiyuki Yokota. To the knowledge of the Independent Evaluation Department, there were no
conflicts of interest of the persons preparing, reviewing, or approving this report.

EXECUTIVE SUMMARY
The Independent Evaluation Department (IED) of the Asian Development Bank (ADB)
has validated the country partnership strategy final review (CPSFR) prepared by the Southeast
Asia Department for the country partnership strategy (CPS) 20112013 for Cambodia. The CPS
had been prepared when Cambodia had just rebounded from the global financial crisis and as
the country was seeking to consolidate the recovery and set a course for sustainable and
inclusive growth.
Country Context
Prior to the CPS 20112013, Cambodia acutely felt the impacts of the global financial
crisis of 20082009. At the same time, it experienced a steep rise in international food prices.
In the first year of the CPS 20112013 period, Cambodia was hit by severe floods which
affected a large part of the country. Nonetheless, Cambodia was able to shake off the impact
of the floods and continue to achieve rapid economic growth while reducing poverty. Gross
domestic product (GDP) grew at 7.1% in 2011, 7.3% in 2012, an estimated 7.2% in 2013, and
is expected to grow at 7.0% in 2014 (Asian Development Outlook 2014). GDP growth has
primarily been driven by household consumption, which accounted for around 85% of real
GDP in 2012. On the supply side, growth was underpinned by exports of garments and
footwear, construction, and tourism revenues. Economic diversification is an emerging trend,
although there continues to be a strong concentration in a small number of sectors. Even as
growth has reduced poverty and inequality over the past decade, many people who have
recently risen above the poverty line remain vulnerable. About 50% of the population is at risk
of falling back into poverty.
Despite some economic turbulence, Cambodia was able to strengthen its financial
position. The International Monetary Fund assigned the country a grading of low risk status
and high debt sustainability in 2011. Its macroeconomic achievements were due in part to
second-generation reforms, and particularly those relating to public financial management. As
a result of these developments, Cambodia continues to have access to Asian Development
Fund (ADF) loansbut not to ADF grants. If the countrys growth trajectory continues,
Cambodia is on a path to achieving lower middle income country status by 2015. It could
receive a boost at that time from realization of the Association of Southeast Asian Nations
(ASEAN) Economic Community, within which goods, investment capital, and skilled labor are
targeted to move more freely among the 10 ASEAN member nations.
Over the CPS period, Cambodia was guided by its Rectangular Strategy on Growth,
Employment, Equity, and Efficiency, Phase II (20082013). The governments strategic focus
was on improving governance; stimulating rice exports; diversifying agriculture; facilitating
trade; and developing physical infrastructure, human resources, and the private sector.
Cambodias poverty reduction goal, updated in mid-2010 with the National Strategic
Development Plan Update, set the objective of reducing poverty to 19.5% by 2015. This
update emphasized (i) commercializing agriculture; (ii) developing value chains for rural
development; (iii) developing logistics and transport systems, especially in the context of
regional integration; (iv) increasing education quality and developing skills to support industry;
(v) enhancing public financial management; (vi) strengthening the finance sector; and (vii)
intensifying commitments to meet the Cambodia Millennium Development Goals.

ii
ADB Program
ADB accompanied the first two phases of the governments Rectangular Strategy with
the country strategy and program 20052009 (extended to 2010) and the CPS 20112013.
ADBs overarching goal in Cambodia during the first two phases of the Rectangular Strategy
has been sustainable poverty reduction through broad-based and inclusive economic growth,
social development, and good governance.
The CPS 20112013 was guided by strategic objectives that shaped sector selection
and thematic approaches. CPS 20112013 objectives focused on inclusive economic growth,
environmentally sustainable growth, and regional integration. The five priority sectors selected
were: (i) transport; (ii) water supply, sanitation, and urban development; (iii) agriculture and
natural resources; (iv) education and training; and (v) finance. The strategy applied the drivers
of change set out in ADBs Strategy 2020 (private sector development, good governance,
gender equity, and regional integration). These drivers of change were consistent with four
cross-cutting themes or challenges identified specifically for Cambodia: (i) environment and
climate change, (ii) decentralization, (iii) urbanrural links, and (iv) regional cooperation.
The ADB portfolio in the CPS 20112013 period saw $555 million approved in 43
operations (loans, grants, and technical assistance). The number of operations approved in the
20092013 period was 70. In value terms, the largest approved allocations in the CPS 2011
2013 went to agriculture and natural resources ($169 million), transport ($131 million), and
public sector management ($67 million).
The scope of the validation covers: (i) the ADB program provided between 2011 and
2013, (ii) the program approved prior to the CPS but implemented during the CPS, and (iii) the
projects that were implemented and completed in 20092010. The last group of projects was
included in the scope of the validation in response to a request from Cambodia Resident
Mission to prepare a more complete review of the country program in preparation of the new
CPS 20142018. The validation reviews the 11 rated projects and 18 unrated projects in the
period 20092013. The evaluation is based on various sources of information, including
documents related to preparation of CPS 2011-2013, project completion reports, review mission
reports, and site visits conducted during the independent evaluation mission.
Assessment
The validation has confirmed some of the self-assessments found in the CPSFR, and in
places it has found that the ratings given were not supported, thus leading to revised ratings as
indicated in the summaries that follow.
The validation rates strategic positioning as satisfactory. The IED rating recognizes that
the CPS closely reflected country needs, government strategies and plans, and the spirit of
ADBs Strategy 2020. The CPS was underpinned by good analysis, in some cases undertaken
in close cooperation with the government and in consultation with stakeholders. In implementing
the CPS, the program was enlarged or adapted in places to reflect urgent needs and requests
as well as changing circumstances. Coordination with other development partners and
nongovernment organizations was evident, and in many cases appreciated. Offsetting this
result, there were several factors that detracted from an optimal positioning. The link between
the objectives, the sector analyses, and the resource envelope was not clear. Some
inconsistencies are noted in ADBs positioning of the energy sector, with the sector assessment
indicating disengagement and the CPS calling for limited engagement. In practice, actual

iii
ADB operations in energy were substantial at the planning stage and further augmented during
implementation. These inconsistencies between stated strategic intent, planned positioning, and
actual operations are not adequately explained in the CPSFR. There was substantial
underspending (actual disbursements versus targeted in the CPS) in the education sector
(50%), water sector (49%), and finance sector (33%) and the reasons for this underspending is
not adequately discussed in the CPSFR.
The program, as designed and delivered, is assessed by the validation to be relevant.
IED acknowledges the CPSs close correspondence of the program with country and sector
objectives. The challenges of increasing rural incomes, exports, and skill levels for a diversifying
economy are well reflected in the ADB programming choices of subsectors and entry points.
The program was responsive to the governments midstream requests, particularly for projects
responding to natural disasters. The downside of this responsiveness, however, was that the
portfolio became increasingly extended over the course of the CPS implementation, ultimately
covering 10 sectors. The bunching of approvals in 2012 suggests that portfolio planning lacked
foresight. The rationale for this wide sector coverage was not found in the CPS and was not well
presented in the final review.
Similarly, the potential to apply cross-sector themesprincipally decentralization
across the portfolio (which covered several sectors entailing services that could be
decentralized) was not elaborated in the strategy. More resources could have been provided to
address the anticorruption and resettlement challenges outlined in the CPS and that arose
during implementation. There has been limited evidence of substantive initiatives by ADB to
address the issue of corruption. ADBs Office of Anticorruption and Integrity has reported a
rising number of investigations in Cambodia in recent years, which reinforces these concerns.
Similarly, a 2014 compliance review on the Greater Mekong Subregion: Rehabilitation of the
Railway in Cambodia Project indicated that there were deficiencies in institutional capacity in the
resettlement area. Insufficient resources allocated for the three themes of decentralization,
anticorruption, and resettlement were not adequately addressed, given that they were prominent
themes in Cambodia prior to the preparation of the CPS.
The validation rates the program effective in delivering intended results. Of the 11
completed and rated projects covered in this validation, all three evaluated projects have been
assessed as effective, six self-assessed projects as effective or highly effective, and two selfassessed projects as less likely effective. For all projects covered in the validation, most
physical outputs were delivered, or are in the process of being delivered despite processing and
implementation delays. In the case of policy loans, the majority of policy conditions were met.
On a less positive note, there was limited evidence of attaining institutional outputs or achieving
outcomes. Institutional outputs and outcomes listed in project reports tended to focus on early
stage achievements. In part, this result was due to the short period covered by the CPS of three
years.
The program is rated by the validation as less than efficient in the use of resources. Of
the 11 completed and rated projects covered in the validation, eight projects two evaluated
and six self-assessed have been assessed as efficient, and three projects one evaluated
and two self-assessed as less efficient. Additionally, all policy-based lending projects
(program loans) were completed on time, with the majority of policy conditions being met as
planned or shortly thereafter. The findings in some of the assessed projects provided further
evidence of good performance, as economic returns have met or exceeded initial estimates.
Performance was negatively impacted, however, by processing and implementation delays that
occurred in many sectors, including sectors that were CPS priorities. These delays led to

iv
extensions and in some cases to costs exceeding budgeted amounts. Outputs for some projects
were reduced or cancelled. Determining the efficiency of the program was hindered by the
lackor inconsistent applicationof economic and financial analyses at project level. Data on
the use of the facilities built was absent in many cases. Either rigidities in ADB procedures or
poorly executed communication of these requirements hampered engagement with the
government and nongovernment organizations, thus reducing opportunities to efficiently use
available inputs.
Benefits flowing from ADB support are rated by the validation as less likely to be
sustained. Of the 11 completed and rated projects, eight projects one evaluated and seven
self-assessed have been assessed as likely sustainable, and three projects two evaluated
and one self-assessed as less likely sustainable. These assessments reflected achieved
outcomes or the anticipation that achieved outputs would, in time, lead to project or sector-wide
outcomes. ADB has given attention to the enabling environment, providing considerable support
for legislative and regulatory reforms. These frameworks are critical to anchor the necessary
improvements in downstream institutional capacity development. Despite these efforts,
concerns about sustainability have arisen for both rated and nonrated projects. Most often,
these concerns relate to availability of funding for operations and maintenance and occur in
project reports, the CPSFR, and comments provided to the independent evaluation mission.
Lack of government financing commitments and capacity, and institutional capacity contributed
to uncertainty as to benefit flows from projects and the governments ability to achieve sector
objectives. The concerns regarding sustainability were most evident in the roads and water
sectors and are arising due to difficulties in achieving institutional outcomes, such as
establishing road asset management capacity or community-based maintenance structures.
The validation assesses development impacts to be less than satisfactory. The CPSFR
highlights Cambodias development achievements, particularly in economic development and
poverty reduction. However, progress has been variable across sectors. In particular, the quality
of public sector governance remains a serious challenge. It is difficult to obtain a clear view of
ADBs contribution to development impacts due to the short implementation period (many
projects were approved only in 2012); a limited set of self-assessed and/or evaluated projects;
as well as weaknesses in the CPS results framework and the CPSFR results framework update,
particularly with respect to defining outcome achievements. For these reasons, and because
development impacts are normally best seen some time after project completion, the validation
findings and conclusions on development impacts are tentative. In some sectors and
subsectors, a plausible case can be made for eventual and meaningful development impacts
against CPS sector outcomes (agriculture and natural resources, finance, public sector
management [decentralization]). However, in other sectors, altogether amounting to more than
half of ADB loans, it is not possible to make a case for attribution and a less optimistic view is
supported (transport; water supply, sanitation, and urban development; energy; education and
training; and public sector management [public financial management]).
Overall, the validation rates ADBs CPS design and implementation as less than
successful.
The validation finds the performance of both government and ADB was satisfactory.
Capacity is increasing in government agencies. Delegation to the resident mission is allowing
closer support to be provided to government agencies in some projects. Although coordination
efforts of the government and ADB are adequate on the whole, there remains room for
improvement on both their parts. For instance, more could be done by both parties to reduce
integrity violations in ADB projects. Communication between ADB and the government relating

v
to sector strategies could be better articulated in some cases, especially with respect to
discussions directed to reaching agreement on ADB resource levels and the choice of executing
and implementing agencies.
Lessons and Issues
The validation concurs with the key lessons and recommendations in the CPSFR and
proposes additional lessons, issues, and recommendations for consideration. The additional
lessons are described below:
(i)

(ii)

(iii)

The case for effectiveness and impact could have been given more attention in
ADB operations. Business process guidelines and internal incentives stress rapid
processing and disbursement. Missed opportunities to design and track important
indicators of outcomes, particularly institutional outcomes, have hindered efforts
to determine success and draw lessons. This has reduced ADBs ability to
influence ongoing projects and guide overall program decisions. The
establishment of clear baselines is an essential requirement for improving project
designs.
ADB is not developing convincing measures on how it will address project
sustainability, particularly in the road sector. This shortcoming is related to
weaknesses in designing institutional outcomes and the lack of attention given to
institutional aspects in monitoring and project completion reports.
Implementation challenges and threats to sustainability arise in part from the lack
of attention paid to capacity development for institutions involved in the
preparation and management of projects. While this preparation activity can
require additional effort in project design and preparation measures, and thereby
possibly extend preparation and implementation schedules, the payoff in capacity
gained can make this investment worthwhile.

The validation identifies several issues where greater attention by ADB is needed. ADBs
performance shows it is very responsive to the Government of Cambodia regarding
infrastructure and emergency needs. Nevertheless, it has not yet demonstrated that it can
effectively support the government in some of the more difficult reform and institutional
strengthening efforts.
Efforts to strengthen institutions dealing with ADB projects have had insufficient impact
in reducing integrity violations. It is likely that some improvement is possible by renewing efforts
to address fiduciary safeguards at project level. Broader and more sustainable impact on
fiduciary issues in Cambodia will require a longer-term strategy that sees ADB engage more
intensively with institutions involved in anticorruption initiatives.
There is room for ADB programs to seek synergy across the portfolio. For example,
opportunities have been missed in decentralization policies of the government. Here, ADB has
primarily limited its focus to public sector management operations, and it did not meaningfully
support decentralization in the other sectors where it had a significant presence (e.g.,
infrastructure and education). The CPS lists four cross-cutting challenges that are likely to
become increasingly important: (i) environment and climate change, (ii) decentralization, (iii)
urbanrural links, and (iv) regional cooperation. Attaining stronger linkages and coherence
across the portfolio on these cross-sector issues is a challenge that merits more attention.

vi
The resident missions proposal to frame the ADB portfolio in terms of value chains can
potentially give the portfolio greater coherence. Under this framework, the Cambodia portfolio
would be linked to vulnerabilities or opportunities along the value-added chains of agricultural or
other products. The entry points for ADB support would necessarily cut across several sectors.
The challenge for ADB is to articulate this approach and show the thread across projects, giving
the portfolio coherence and greater impact irrespective of the individual projects sector
designations.
Responsiveness is a characteristic of ADBs program for Cambodia that is valued by the
government, but it is necessary to impose some discipline on this process that reflects the
rationale for the overall portfolio. Striking that balance will require better articulation of the
portfolio rationale. A more robust approach to developing the portfolio logic would also guard
against an overly dispersed portfolio that is joined together by ad hoc and retrospective
rationales. The linkages between projects (e.g., projects that fall along an agricultural value
chain) would drive the portfolios spread over sectors. This approach to the portfolio should
allow ADB to determine how to respond to the many government requests that arise due to
changing circumstances and perceptions of need throughout the CPS period. Where projects do
not fit the portfolio logic, linkages need to be demonstrated with initiatives by other development
partners.
Another portfolio-wide issue is the difficulty encountered in ascertaining the progress and
success of ADB operations and strategies. A more determined effort is needed within ADB to
fashion robust results frameworks. Ideally, this effort will be tied to support given to the
government, enabling it to take a larger role in crafting project design and monitoring
frameworks or sector and CPS results frameworks in a way that strengthens country systembased data and reporting.
Recommendations
In line with the issues identified in the validation, the following recommendations are
offered for consideration:
(i)

(ii)

(iii)
(iv)

The CPS needs to demonstrate how institutional capacity will be developed at

both the strategic level within the country for critical institutions such as anticorruption units and an ombudsman, and at the project level, by strengthening
executing and implementing agencies to meet program objectives and mitigate
governance and safeguard risks. Good practices needs to be in greater
evidence, particularly regarding possible entry points (individual, institutional,
enabling environment), sound diagnostic preparation, and sufficiently long time
frames to attain significant changes.
The CPS results framework needs to reflect the sector results frameworks and
the planned program and provide a clear set of indicators and baselines to
measure effectiveness, efficiency, and in particular, sustainability. These
frameworks need to provide details on how these measures will be addressed.
An effort needs to be made to clearly articulate the value chain approach to
justify engaging in programs that cut across sectors.
In view of the longer time period of CPS 20142018, a CPS midterm review
needs to be undertaken that is focused on sector and CPS results framework
reviews. It needs to allow for the evaluation of cross-sector impacts and be
based on the participatory approach used to develop the CPS 20112013. This

vii
review needs to lead to adjustments in indicators and strategies to reflect
changing circumstances.

I.
A.

BACKGROUND INFORMATION

Validation Purposes and Procedures

1.
The Asian Development Bank (ADB) formulated and implemented the Cambodia country
partnership strategy (CPS), 20112013.1 The Southeast Asia Department prepared a CPS final
review (CPSFR)2 in 2013 to identify lessons and draw recommendations to inform the new CPS
under preparation.3
2.
The Independent Evaluation Department (IED) has prepared this report to (i) validate the
CPSFR findings, (ii) assess the quality of the self-evaluation, and (iii) identify lessons and
recommendations to improve the design and implementation of the new CPS while providing a
basis to ensure accountability for future self-evaluations.
3.
This validation report is based on (i) findings of the CPSFR report, (ii) a desk review, (iii)
findings of an independent evaluation mission (IEM) through consultations in Cambodia and
field visits to selected project sites,4 and (iv) consultations with relevant ADB staff based at
headquarters. In Cambodia, the IEM met with staff of ADBs Cambodia Resident Mission, as
well as representatives of the relevant government agencies, development partners, and
nongovernment organizations (NGOs).
4.
The scope of the validation conforms to the CPSFR validation guidelines.5 It covers the
CPS, the country operations business plans prepared from 2011 to 2013, and the ADB
assistance program provided between 2011 and 2013. The validation encompasses the
program that was approved prior to the CPS but was implemented during the CPS. Additionally,
in response to a request from the resident mission to prepare a more complete review to assist
in preparing the new CPS (20142018), the IEM agreed during the mission to enlarge the scope
to include the projects that were under implementation during 20092010.6
5.
Tables 1 and 2 delineate those projects that are the focus of the validation. They contain
the 11 rated projectscomprising eight self-assessed and three evaluatedthat fall under the
agreed period (Table 1) and the 18 projects in the same period that were not rated and were
reviewed on the basis of the review mission reports (back-to-office reports, aide memoires, or
memoranda of understanding) and site visits (Table 2). The projects in Table 1 are part of the
list of rated projects that were reviewed in the CPSFR. In addition, the CPSFR included three
projects that were not included in the validation: (i) Loan 1753: Stung Chinit Irrigation and Rural
Infrastructure (closed on 4 December 2008), (ii) Loan 2129: Small and Medium-Sized Enterprise
1
2
3
4

5
6

ADB. 2011. Country Partnership Strategy: Cambodia, 20112013. Manila.

ADB. 2013. Country Partnership Strategy Final Review: Cambodia, 20112013. Manila (accessible from the list of
linked documents in the Appendix).
The next CPS is to cover the 20142018 period (to match the government planning cycle).
The IEM visited Cambodia from 18 to 24 March 2014 to validate the CPSFR. It also visited the field locations
covered under the following loans: (i) Loan 1953-CAM: Commune Council Development Project, (ii) Loan 2670CAM: Rural Roads Improvement Project, and (iii) Loan 2852-CAM: Flood Damage Emergency Reconstruction
Project.
ADB. 2011. Guidelines for the Preparation of Country Partnership Strategy Final Review Validation Report. Manila
(IED, draft).
The IED validation guidelines (Draft 2011) state Under normal circumstances, a CPSFRshould evaluate the
performance of both country strategy and assistance programsapproved under the current CPS. Ongoing loans
and TA projects approved under the preceding CPS, but being implemented under the current CPS period should
also be included in the CPSFR. This guidance would therefore normally exclude projects completed prior to the
CPS period.

2
Development (closed on 31 August 2008), and (iii) Loans 1864 and 1865: Education Sector
Development Program (closed on 18 September 2008).
Table 1: Project Ratings for Projects Closed between 2009 and 2013
Project Name
Amt
Rating
(loan or grant number)
$mn
APPRV
COMP
(source) RELV
EFEC
EFIC
SSTB
Northwestern Rural
27.2
Nov
Nov
PS
R
EFV
LeEFN
LeSTN
Development Project
2001
2009
(PVR)
(1862)
HSP
Health Sector Support
20.0
Nov
Jun
S
HR
EFV
EFN
MoSTN
Project (and Japan
2002
2010
(PCR)
Fund for Poverty
Reduction grant) (1940)
TR
GMS: Cambodia Road
50.0
Nov
Sep
S
R
EFV
EFN
LeSTN
Improvement Project
2002
2011
(PVR)
(1945)
ANR
Tonle Sap
10.9
Nov
Sep
S
R
EFV
EFN
LiSTN
Environmental
2002
2009
(PVR)
Management Project
(1939)
EN
Greater Mekong
44.3
Dec
May
S
HR
EFV
EFN
LiSTN
Subregion Transmission
2003
2011
(PCR)
Project (2052)
ANR
Agriculture Sector
29.7
Nov
Jun
S
HR
EFV
EFN
LiSTN
Development Program
2003
2010
(PCR)
(2022/2023)
ED
Second Education
45.0
Dec
Jun
S
HR
EFV
EFN
LiSTN
Sector Development
2004
2010
(PCR)
Program (2121/2122)
ANR
Tonle Sap Sustainable
19.7
Dec
Jul
LeSCS
R
LeEFV
LeEFN
LiSTN
Livelihoods Project
2005
2011
(PCR)
(G0034/G0035)
WM
Tonle Sap Rural Water
18.0
Oct
Jul
LeSCS
HR
LeEFV
LeEFN
LeSTN
Supply and Sanitation
2005
2010
(PCR)
Sector Project (G0018)
PSM
Commune Council
7.8
Dec
Sep
S
HR
EFV
EFN
LiSTN
Development Project 2
2006
2010
(PCR)
(G0066)
FN
Second Financial
30.3 Dec 08,
Jun
HS
HR
HEFV
EFN
LiSTN
Sector Program Cluster
Nov 09,
2011
(PCR)
(Subprograms 24)
Dec 10
(2479/2585/2706)
Amt = amount, ANR = agriculture and natural resources, APPRV = approval month and year, COMP = completion month
and year, ED = education, EFEC = effectiveness, EFIC = efficiency, EFN = efficient, EFV = effective, EN = energy, FN =
finance, HEFV = highly effective, HR = highly relevant, HS = highly successful, HSP = health and social protection, LeEFN =
less efficient, LeEFV = less effective, LeSCS = less than successful, LeSTN = less likely sustainable, LiSTN = likely
sustainable, mn = million, MoSTN = most likely sustainable, PCR = project completion report, PS = partially successful, PSM
= public sector management, PVR = project validation report, R = relevant, RELV = relevance, S = successful, SEC =
sector, SSTB = sustainability, TR = transport and information communication technology, WM = water supply and other
municipal infrastructure and services.
Source: Independent Evaluation Department.
SEC
ANR

3
Table 2: Active Projects during 20092013
SEC
PSM
ANR
EN
TR
ANR
TR
ANR

Project Name (loan or grant number)

Public Financial Management for Rural
Development Program (Subprogram 2)
(G0222)
Northwest Irrigation Sector Project
(2035/G3003.01)
Second Power Transmission and
Distribution Project (2261)
GMS: Rehabilitation of the Railway in
Cambodia Project (2288/2602/G0187)
Tonle Sap Lowlands Rural Development
Project (2376/G0092)
Road Asset Management Project (2406)

Amt
($mn)
5.0

APPRV
Sep 2010

Information Source
BTOR, midterm mission report, MOU
(October 2013)

18.0

Dec 2011

20.0

Oct 2006

42.0
42.0
21.5
10.1
9.9
6.0

Jan 07
Dec 09

PCR of Government of CambodiaMinistry

of Water Resources and Meteorology
(December 2011)
BTOR of joint loan review mission (March
2014)
BTOR and aide memoire of special project
administration mission (February 2013)

Dec 2007

BTOR of review mission (October 2013)

Jan 2008

BTOR of final review mission (March 2014)

Emergency Food Assistance Project

(2455)
GMS: Cambodia Northwest Road
Improvement Project (2539)
Tonle Sap Poverty Reduction and
Smallholder Development Project (2599)

17.5

Oct 2008

BTOR of review mission (December 2011)

16.3

Aug 2009

3.4

Dec 2009

TR

Rural Roads Improvement Project (2670)

35.0

Sep 2010

ANR

Water Resources Management Sector

Development Program (Project Loan)
(2672)
Provincial Roads Improvement Project
(2839/8254/G0278)

10.0

Sep 2010

BTOR of final review mission (December

2013)
BTOR of review mission (March 2014)
aide memoire of project review mission
(February 2014)
BTOR of review mission, site visit (February
2014)
MOU review mission (September 2013)

52.0
10.0
7.0
55.0

Dec 2011

BTOR of review mission (April 2014)

Mar 2012

30.0

Sep 2012

MOU of midterm review (28 January 2014),

site visit (25 November to 13 December
2013)
BTOR (January 2014)

45.0

Dec 2012

BTOR of inception mission (February 2014)

15.0

May 2013

10.0

Sep 2010

BTOR and MOU of consultation mission

(November 2013)
BTOR (February 2010)

25.0

Sep 2012

TR
ANR

TR
MU

Flood Damage Emergency

Reconstruction Project (2852)

ED

Third Education Sector Development

Program (2888/2889)
Medium Voltage Sub-Transmission
Expansion Sector Project (2979/8264)
Third Financial Sector Program
(Subprogram 2) (3002)
Promoting Economic Diversification
Program (Subprogram 2) (2675)
Promoting Economic Diversification
Program (Subprogram 3) (2904)

EN
FN
PSM
PSM

BTOR of reconnaissance mission for project

preparatory technical assistance, follow-up
mission (June 2012)
Amt = amount, ANR = agriculture and natural resources, APPRV = approval month and year, BTOR = back-to-office report,
ED = education, EN = energy, FN = finance, GMS = Greater Mekong Subregion, mn = million, MOU = memorandum of
understanding, MU = multisector, PCR = project completion report, PSM = public sector management, SEC = sector, TR =
transport and information communication technology.
Source: Independent Evaluation Department.

4
B.

Country Context and Government Development Plans

1.

Country Context

6.
Economic growth: Cambodias economy grew strongly in the period prior to the CPS
20112013, enabling it to reduce the incidence of poverty from 53.2% in 2004 to 20.5% in
2011. 7 This strong performance has continued through the CPS period, and gross domestic
product (GDP) grew at 7.1% in 2011, 7.3% in 2012, an estimated 7.2% in 2013, and is expected
to grow at 7.0% in 2014 (Asian Development Outlook 2014). GDP growth has been driven by
robust domestic demand, as household consumption alone accounted for around 85% of real
GDP in 2012. From the supply side, growth has been led by services and industry and
supported by strong agricultural performance. Reflecting this favorable economic environment,
in 2011 Cambodia was categorized by the International Monetary Fund as having low risk status
and high debt sustainability (low debt distress). 8 As a result, in accordance with Asian
Development Fund (ADF) parameters, Cambodias access to ADF grants has ended, although it
can continue to access ADF loans. While growth has been strong for more than a decade, it has
been volatile, particularly in the CPS period. The global financial crisis of 20082009 in
combination with a steep rise in international food prices prompted ADB to provide emergency
food assistance. Severe floods affected the country in 2011, the first year of the CPS period,
which prompted ADB to implement a flood damage emergency reconstruction project. In 2013,
there was a period of political turbulence following national elections, together with strikes for
higher wages by garment workers that disrupted some production of garments and footwear
and reduced investor confidence.
7.
Future economic performance. Assuming the high growth rates (7.0%7.5%) from
2013 and 2014 continue,9 Cambodia will reach lower middle income country status by 2015. In
2015, Cambodia will be affected by creation of the Association of Southeast Asian Nations
(ASEAN) Economic Community, where goods, investment capital, and skilled labor will be
permitted to move more freely among the 10 ASEAN member nations. This will bring to the
country both challenges and opportunities.
8.
Income Distribution: The Gini index for Cambodia stood at 36 in 2009, after being as
high as 44 in 2007. 10 This result places Cambodia among the more equitable developing
economies, although recent data is lacking. Nevertheless, there are a number of factors that
suggest inequality will continue to be a concern. It is still difficult for small firms in Cambodia to
join the formal economy. In the World Banks 2011 Doing Business report, Cambodia dropped
from 145th place to 147th (out of 183 countries). The low ranking is mainly due to
nontransparent and costly business registration procedures. Cambodia has no credible
antimonopoly or antitrust statutes to curb anticompetitive practices.11 As a majority (78.6%) of
Cambodians lives in rural areas, land ownership is a key determinant of life outcomes. Land
ownership has become more concentrated. The number of people owning any type of land fell
substantially from 90% to 70% over the period 20102013. 12 These developments favor
increasing concentration of wealth rather than inclusive growth.
7

World Bank, 2013. Where Have All the Poor Gone? Poverty Monitoring and Analysis, Policy Note. Washington DC.
International Monetary Fund. 2012. Cambodia: Staff Report for the 2012 Article IV ConsultationDebt
Sustainability Analysis. Washington, DC.
9
The economic growth rates are predicted by the World Bank and ADBs Asian Development Outlook.
10
World Bank. Gini Index. http://data.worldbank.org/indicator/SI.POV.GINI (accessed 21 July 2014).
11
Bertelmanns Stiftung. 2012. Bertelmanns Transformation Index 2012: Cambodia Country Report. Gtersloh (p. 16).
12
S. Kumar, and Ny Boret. 2013. Inequality and Regional Disparity in Cambodia: Status, Trends and Policy Options.
Background Paper for Cambodia Human Development Report 2014.
8

5
9.
Poverty. Although the reduction in the poverty rate over the past decade has been
impressive, many of the poor have only recently managed to rise above the poverty threshold. A
large segment of the populationthought to be as high as 50%is vulnerable to economic
shocks and could easily fall back into poverty. 13 Most vulnerable are infants and children,
women of reproductive age, households with insecure sources of food, and special vulnerable
groups (e.g., orphans or people living with HIV). The risk of these groups falling back into
poverty ensues from the following factors: (i) crisis and emergency (including macroeconomic
crises and natural disasters), (ii) low human development (including poor nutrition and poor
access to education), (iii) seasonal unemployment and food insecurity, and (iv) health shocks.14
2.

Government Development Plans

10.
During the term of the fourth legislature (20092013) Cambodia continued to implement
the Rectangular Strategy on Growth, Employment, Equity, and Efficiency, Phase II. This plan
focused on improving governance; stimulating rice exports; diversifying agriculture; facilitating
trade; and developing physical infrastructure; human resources; and the private sector. The
National Strategic Development Plan (NSDP) Update in mid-2010 emphasized the objective of
reducing poverty to 19.5% by 2015. The policy objectives of the NSDP that influenced the CPS
20112013 included the following (among others): (i) commercializing agriculture and
developing value chains for rural development; (ii) developing logistics and transport systems,
especially in the context of regional integration; (iii) increasing education quality and developing
skills to support industry; (iv) enhancing public financial management (PFM); (v) strengthening
the finance sector, including capital markets development; and (vi) intensifying commitments to
meet Cambodias Millennium Development Goals.
3.

ADBs Support to the Governments Development Plans

11.
As of 31 December 2010, the CPS 201113 indicated the ADB portfolio was $1.167
billion.15 The CPS results framework for 20112013 stated that ADB would provide assistance
to seven sectors, consisting of (i) agriculture, (ii) education, (iii) finance, (iv) water, (v) transport,
(vi) public sector management (PSM), and (vii) energy. The CPS stated it would provide total
lending assistance of $425 million 16 plus nonlending assistance of $37 million, bringing total
assistance to $462 million. ADB assistance would be provided for up to 99% of expected costs,
and the CPS indicated that for 20112012 the loans would be sourced from concessionary ADF
financing. It was expected that about five loans would be processed per year in the five priority
sectors over the CPS period. The results framework indicated a total program of $440 million
would be provided by ADB over the CPS period. It gave no breakdown by type and source of
funding (i.e., technical assistance [TA], ADB loan, and cofinancing). The CPSFR based its
analysis on the figures presented in the results framework, which were in turn derived from
sector plans, and covered the period 2011 to June 2013. A summary of the planned versus
actual results is presented in Table 3.

13

World Bank. 2013. Cambodia Economy Remains Robust Amidst a Challenge. Press release. 7 October. http://www
.worldbank.org/en/news/press-release/2013/10/07/cambodia-economy-remains-robust-amidst-a-challenge
14
ADB. 2011. Poverty Analysis (Summary). Supplementary document to ADB. 2011. Country Partnership Strategy:
Cambodia, 20112013. Manila (p. 2).
15
Footnote 1, p. i.
16
Regional lending of $33.5 million set aside for the GMS program is excluded from the total lending of $425 million
(ADF total lending of $272.7 million for 20112012 plus $152 million for 2013). Source: CPS 20112013, para. 36.

6
Table 3: Planned versus Actual Loans for 20112013
($ million, except as indicated)
% Total
TA and
ADB
% Total
Difference
Sector
Plan (A)
Loan
Actual
Grant
Cofinance Loan (B) ADB loan
(BA)/A
a
Transport
87
20%
131
14
10
107
26%
23%
Agriculture
85
19%
169
70
9
91
22%
7%
Water
73
17%
50
8
5
37
9%
(49%)
Education
60
14%
31
1
0
30
7%
(50%)
Finance
45
10%
32
2
0
30
7%
(33%)
PSM
45
10%
67
5
0
62
15%
39%
Energy
45
10%
61
6
10
45
11%
0%
Industry and trade
0
0%
13
2
0
11
3%
Total
440
100%
555
108
34
413
100%
(6%)
ADB = Asian Development Bank, PSM = public sector management, TA = technical assistance.
Note: Numbers may not sum precisely or percentages appear exact because of rounding.
a
The Flood Damage Emergency Reconstruction Project (2012), categorized in the CPS Final Review as multisector,
is included here in transport as it pertained to roads.
Sources: CPS results framework, CPS final review Appendix 2, and IED calculation.

12.
The planned results show that the top-priority sector in the CPS was transport, with its
focus on developing roads and rail. Agriculture was the second priority, and its focus was on
irrigation, flood protection, and agro-industry development. Planned water sector interventions
were targeted at both rural and urban households. Education assistance was directed to
secondary education and technical and vocational education and training (TVET) facilities.
Finance sector assistance was directed to strengthening central bank capacity, microfinance
outreach, and development of insurance. PSM focused on decentralization, fiscal management,
and legal reforms. There was no strategic objective in relation to the energy sector, yet it
continued to account for 10% of the program. An industry and trade project to develop sanitary
and phytosanitary handling was part of the CPS program but it was not included in the results
framework.
13.
The actual results were materially different from the plan, although the overall actual
volume of lending over the period of $413 million was broadly similar to the planned lending
target of $440 million, a difference of 6%. Almost 82% of disbursements occurred in 2012, and
a significant proportion of these funds were provided due to problems with widespread flooding
in the country. A further factor impacting on the disbursement profile was political instability in
2013 that negatively impacted loan approvals. As a consequence of these developments, only
13 loans were processed over the CPS period, compared to a target of 25. Within this total, 8
loans were processed in 2012. These 8 loans were primarily related to mitigating the impact of
floods and were allocated through transport and agriculture sector loans. This caused actual
loans in these two sectors to exceed planned amounts by 26% and 22%, respectively. The
actual result for the PSM program exceeded the plan due to a widely ranging program that is
being implemented to strengthen public sector capacity at the national and local levels. Actual
approvals in the water, education, and finance sectors were substantially less than expected.
14.
The CPS noted that the 2009 country assistance program evaluation (CAPE) rated
ADBs program of assistance in Cambodia as successful and reiterated its key
recommendations (para. 9). The CPSFR also notes the CAPE and its recommendations (para.
10). The key recommendations of the CAM CAPE 2009 were to: (i) focus on fewer subsectors,
(ii) improve investment efficiency and harness synergies between national and subregional
initiatives, (iii) foster good governance standards, (iv) explore other financing modalities to
supplement ADF resources, (v) promote private-sector-led growth and income generation
through improved rural and urban infrastructure services, and (vi) improve service delivery

7
through more policy dialogue and delegation of project administration. The CPS 201113 did
not systematically address the recommendations raised in the CAPE, but it did mention that
some findings shaped its Decentralization and Deconcentration program, PFM, and
anticorruption measures. On portfolio management it drew on other findings to: (i) apply
innovations in portfolio selectivity; (ii) increase the average size of projects through various
financing modalities; (iii) select the appropriate financing modality and mobilize cofinancing; (iv)
assess capacity of executing agencies; (v) selectively delegate projects to CARM; (vi) improve
adherence to project readiness filters; and (vii) improve monitoring and evaluation (M&E) of
ADB activities through stronger results frameworks.
C.

Country Partnership Strategy Priorities and Development Partner Roles

15.
ADBs country strategy and program, 20052009 (extended to 2010) and CPS 2011
2013 accompanied the first two phases of the governments Rectangular Strategy. ADBs
overarching goal in Cambodia during this period was sustainable poverty reduction through
broad-based inclusive economic growth, social development, and good governance. Main
outcomes were (i) enhanced agricultural productivity and diversification; (ii) strengthened
human capital through improved rural water supply and sanitation, and better access to quality
general education and industry-related TVET; (iii) improved transport infrastructure and
services and access to markets, and (iv) a growing resilient and efficient financial system.
16.
The CPS 20112013 was guided by strategic objectives that shaped sector selection
and thematic approaches. CPS 20112013 objectives focused on inclusive economic growth,
environmentally sustainable growth, and regional integration. The five priority sectors selected
were: (i) transport; (ii) water supply, sanitation, and urban development; (iii) agriculture and
natural resources; (iv) education and training; and (v) finance. The strategy applied the drivers
of change set out in ADBs Strategy 2020 (private sector development, good governance,
gender equity, and regional integration). These drivers of change were consistent with four
cross-cutting themes or challenges identified specifically for Cambodia: (i) environment and
climate change, (ii) decentralization, (iii) urbanrural links, and (iv) regional cooperation.
17.
The NSDP Update called for partnerships in development. Strategy 2020 sees
partnerships as a core element of ADBs business model. Multilateral and bilateral development
partners were committed to support Cambodias development, and coordination was considered
as a priority objective. The government has strengthened the 19 government-led technical
working groups comprising public sector agencies and development partners. In 2013, ADB has
served as the Lead Development Partner Facilitator and in 2012, ADB co-chaired the D&D and
the PSD-related TWGs. ADB consults key development partners when formulating the CPS and
the country operations business plan (COBP), and participates in joint portfolio performance
reviews with key development partners, including the World Bank and the Japan International
Cooperation Agency. There was no formal demarcation of areas of responsibility between the
development partners and the purpose of the reviews was to share information.
II.

VALIDATION OF THE COUNTRY PARTNERSHIP STRATEGY FINAL REVIEW

18.
This section reviews the findings in the CPSFR and where possible validates its overall
assessment of the CPS performance against eight criteria: (i) strategic positioning, (ii) program
relevance, (iii) effectiveness, (iv) efficiency, (v) sustainability, (vi) development impacts, (vii)
ADB performance, and (viii) borrower performance. The validation reviews these findings and
provides an overall assessment of CPS performance that is based on the first six of these
criteria.

8
A.

Strategic Positioning

19.
Following the IED CPSFR validation guidelines (2011), several major sub-criteria were
considered in validating this rating: (i) country context and alignment with the governments
strategy and plans, (ii) consistency with ADB Strategy 2020, (ii) adherence to the principles of
the Paris Declaration on Aid Effectiveness, (iv) country diagnostics and development
challenges, (v) appropriateness of the resource envelope, and (vi) adequacy of the results
framework for monitoring the progress of CPS implementation and evaluating ensuing
development outcomes. This section of the validation reviews the CPS strategic positioning
using criteria similar to those used in the CPSFR.
20.
The validation reviews the CPSFR rating of highly satisfactory, indicating where it
concurs and where additional considerations are necessary. The validation concludes that an
adjusted rating for strategic positioning is needed, assessing it as satisfactory. The primary
weaknesses with the CPS relate to lack of clarity on how the CPS program and its
implementation were supportive of the overarching CPS objectives of inclusive economic growth
and social development and equity, and the lack of implementation of a significant proportion of
the original program presented in the CPS. The lack of clarity arises from (i) an unnecessary
attempt (in the CPSFR) to force projects in priority areas to demonstrate that CPS allocations
were in line with Strategy 2020, and (ii), and inadequate results frameworks in the CPS and
CPSFR.
21.
Relevance to the governments strategy. The CPS 20112013 states its alignment
with the Rectangular Strategy 20092013 and the NSDP Update of 2010. ADBs intention to
align the subsequent CPS with the government strategy is also evidenced by the relatively short
duration of the CPS. The country operations business plan for 20082010 was based on the
premise that it would be followed by a 5-year CPS. In practice, this strategy was not
implemented as ADB decided to realign the CPS period with the government strategic planning
cycle. As a result, ADB decided to limit the CPS period to 20112013 and to synchronize the
CPS 20142018 with the anticipated NSDP 20142018. This approach is in line with the
movement toward recognizing and making the best use of government systems. The
overarching objectives of the CPS program were to promote inclusive growth and social
development and equity. These objectives reflect the governments overarching goal of reducing
poverty by 1% per annum.
22.
Relevance to ADBs corporate strategy and the Principles of the Paris Declaration.
The CPSFR shows how the CPS adhered to ADBs Strategy 2020 and the sector allocation was
relevant to ADBs corporate strategy. The validation confirms that the CPS objectives reflect the
three pillars in ADBs Strategy 2020 of inclusive growth, environmental sustainability and
regional integration. Similarly, the objectives reflected the principles of the Paris Declaration.
These objectives were developed in close cooperation with the government and in consultation
with stakeholders. In implementing the CPS, the program was enlarged or adapted in places to
reflect urgent needs and requests as well as changing circumstances.
23.
The validation acknowledges that most, if not all, projects identified in the CPS have the
potential to make a contribution to the overarching objective of inclusive economic growth, but it
considers the CPSFR claim that all projects were oriented toward achieving inclusive
economic growth to be overstating the situation. Although it may be correct that projects are
classified under this heading in ADBs Cambodian portfolio, Strategy 2020, prepared in 2008,
should nevertheless have guided ADB to be more explicit in defining how all of three pillars of

9
inclusive economic growth would be addressed in the CPS and its implementation. 17 A
meaningful claim would acknowledge that support for this objective requires adequate support
for social protectionthe third and integral pillar of inclusive economic growth. The CPS and
CPSFR do not adequately document how the planned and actual social protection support
would be or was provided by ADB.
24.
Country Diagnostics and the Quality of the Resource Envelope. Overall, the CPS
and information provided in the CPSFR confirm the relevance and coherence of ADB sector
strategies.18 The sector assessments clearly lay out the governments strategies and plans for
the sectors and how ADB will support these programs. For instance, the governments
education sector objective of greater secondary level enrollment, particularly for girls, shaped
the Second Educational Support Development Program. 19 However, the link between the
objectives, the sector analyses, and the resource envelope are not clear. The CPSFR notes that
CPS sector allocations in priority areas (77% in its calculations) come close to meeting the
benchmark set in Strategy 2020 (CPSFR, p. 15) of allocating 80% of loans to infrastructure by
2012. In fact, when the agricultural projects are taken out of the environment category, the CPS
is substantially below that benchmark (at 56%). It is important to note that the CPS makes no
commitment to attain the Strategy 2020 80% benchmark. The sector allocation is largely
justified on the basis of country needs and specific government strategies and plans. As a
result, the CPSFR reclassification makes it difficult to discern the logic of the underlying portfolio
structure. Further confusion is created by the focus in the CPSFR on value chains, as the
linkages between the objectives, the sector studies, and resource allocation to support the value
chains concept along supply chains is not clearly articulated, particularly in regard to how cross
sector linkages will be developed.
25.
In some cases, the alignment between ADB and government sector strategies is not
optimal across all sectors. For instance, the CPS notes that the ADB sector interventions will be
anchored as much as possible in emerging Decentralization and Deconcentration structures,
including through the Sub-National Investment Facility, a new funding mechanism for rural
infrastructure investments. In practice, the governments decentralization strategies and plans
are not very visible in the CPS sector programs and projects. The PSM sector is an exception,
as a decentralization sector development project is being implemented there. The reports and
recommendations of the President for projects in other sectors (agriculture, education, rural
infrastructure, and water infrastructure) indicate a commitment to align the projects with
emerging government policies for decentralization, but their project designs reflect little policy
dialogue and support to explore or pilot new institutional arrangements.
26.
There are inconsistencies between stated objectives and the resource allocation for
reasons that appear to be independent of government and ADB stated priorities. For example,
ADB has not adhered to its intention stated in the CPS to have limited engagement in the
energy sector. In a supplementary document of the CPS 20112013, it is noted that Energy is

17

Strategy 2020 describes inclusive growth based on three pillars: (i) high, sustainable growth to create and expand
economic opportunities; (ii) broader access to these opportunities to ensure that members of society can
participate and benefit from growth; and (iii) social safety nets to prevent extreme deprivation. See
http://www.adb.org/themes/poverty/topics/inclusive-growth
18
This criterion is partially addressed in the CPSFR, which explains the overall estimated resource envelope and its
division by source - ADF or ordinary capital resources. However, the CPSFR does address aspects of coherence
under section B. Program Relevance.
19
This loan was effective in August 2005 and closed in June 2010.

10
being considered for disengagement. 20 Nevertheless, energys allocation in the CPS of $45
million is the same amount as that for finance and for PSM (each at 9.6%). Both of the latter are
core programs. The CPSFR notes that in the actual approvals for the CPS period the planned
allocation for the energy sector was exceeded. In the end, there were three such projects
valued at $61.1 million and representing 11% of the portfolio.21 The CPSFR indicates the sector
was low in priority (standby status), but it does not explain why the amount of assistance was
relatively so large and whether it would persist in the future. The relevance of the CPS program,
relative to what was implemented is further reduced by the significant proportion of the
programs in sectors such as education and water that were not implemented.
27.
Design quality of the country results framework. The CSPFR notes that linkages
between project design and monitoring frameworks (DMFs) and sector results frameworks and
between the sector results frameworks and the CPS results framework, respectively, are logical
in most cases and systematic. The CPSFR notes that some sector outcomes are too
ambitious. Offsetting this result, the validation found that some outcome indicators are not
matched with programs that would provide a plausible case for demonstrating an ADB
contribution. For instance, a forestry cover indicator is connected to a biodiversity project that
only covers a small area of forest and which is unlikely to add to the forest cover, although it
may add to the quality of the forest. The CPS results framework provides no substantive
institutional outcomes indicators, despite having considerable institutional support and targets
embedded in the individual operations which are reflected in the sector assessments, strategies,
and road maps (ASR).22 These deficiencies in the DMFs and/or results frameworks make the
CPS difficult to assess, and they reduce the likelihood that useful lessons can be drawn from
project implementation and carried into the next CPS.
28.
Coordination with development partners and NGOs. ADB engages with development
partners in several ways that are reflected with reasonable accuracy in the CPSFR. ADB has
been a strong participant in technical working groups that bring the government together with
development partners. It has acted as cochair in the Decentralization and Deconcentration
Technical Working Group. ADB has attracted a high level of cofinancing from development
partners, accounting for 22.5% of the total for the CPS 20112013 period. Joint portfolio reviews
have also been undertaken annually during the CPS period with the government, the Japan
International Cooperation Agency, and the World Bank. The ADB has also acted as the Lead
Development Partner Facilitator, enabling it to be more effective in mobilizing other
development partners resources. The validation notes that during discussions with the validation
team, some developing partners raised concerns about the lack of coordination with ADB at the
operational level, although it is difficult to substantiate these assertions. There is also evidence
of a lack of coordination with new developing partners and this type of risk needs to be carefully
managed.

20

Stated in the supplementary document Country Partnership Strategy Formulation which is linked to ADB. 2011.
Country Partnership Strategy. 2011-2013. Manila.
21
Footnote 2, p. 61.
22
See the following supplementary documents (ASR summaries) linked to the Country Partnership Strategy:
Cambodia, 20112013: Sector Assessment: Public Sector Management; Sector Assessment (Summary): Energy;
Sector Assessment (Summary): Agriculture and Natural Resources; Sector Assessment (Summary): Education
and Training; Sector Assessment (Summary): Water Supply, Sanitation, and Other Municipal Infrastructure and
Services; Sector Assessment (Summary): Finance; Sector Assessment (Summary): Transport. These documents
can be retrieved at http://www.adb.org/Documents/CPS/?id=CAM-2011

11
B.

Program Relevance

29.
The validation acknowledges the responsiveness of the CPS to country needs.
However, it revises the CPSFR rating of highly relevant to relevant due to the lack of a rationale
to support the overall allocation of resources in the portfolio, and the insufficiency of resources
and effort applied to address institutional factors related to governance risk (particularly
corruption) and resettlement issues.
30.
Program relevance in relation to sector strategies and issues. The CPSFR
assesses the programs as being responsive to country needs and reflective of the key issues
found in the sector ASR. It notes that some additional projects were introduced during
implementation, explaining that these projects were initiated in response to urgent needs such
as flood damage reconstruction. Due to ADBs responsiveness, the sector coverage of the
portfolio has increased in total to 10. The CPSFR justifies this arrangement on the basis that
this sector spread is comparable to those for other developing member countries in the region.
31.
The validation agrees that the portfolio presented in the CPS reflected many of the
salient strategies and technical issues and challenges in the sector ASR. The challenge of
increasing rural incomes, exports, and skill levels for a diversifying economy are well reflected in
the ADB programming choices of subsectors and entry points. In terms of sector spread,
however, the validation does not accept the view presented in the CPSFR that comparison of
Cambodias broad coverage to those of other developing member countries is the most useful
way to determine the relevance of the Cambodian program to ADB and country priorities. In
particular, a stronger rationale is required for the additions to the original CPS, as some of these
projects were not emergency in nature.23 For example, the inclusion of the project preparation
technical assistance for the urban water and sanitation sector suggests an increasing emphasis
on the urban environment. This change in emphasis may be justified, but the rationale is not
presented in the CPSFR. The CPSFR could have flagged this shift in strategy during the CPS
period and this would have helped to set the stage for presenting a revised urban development
program in the next CPS.
32.
Program quality and resources. The relevance of the CPS program can be affected by
project design quality and the levels of attention and resources applied relative to the strategic
directions or emphasis found in the CPS. As most approvals for the CPS program were
obtained in 2012, the validation concurs with the view presented in the CPSFR that quality likely
has been eroded as a result of bunching up of project approvals. Processing many approvals in
one year was bound to place the government and ADB under great pressure. Also, it was
known that the national elections were scheduled for 2013 and that this would add to the risk of
delays in loan signing and in projects start dates.
33.
The CPSFR notes the approval of a large number of loans and grants in the single year
2012 could have overburdened ADB project teams and government counterparts and
compromised the quality of projects and programs. The validation supports this view, confirms
23

A comparison of the CPSFR list of approved operations in the 20112013 period shows that several
nonemergency additions were made to the CPS, as operationalized in the country operations business plan 2011
2013: Medium-Voltage Sub-Transmission Expansion Sector Project, Second GMS Regional Communicable
Diseases Control Project, Small-Scale Technical Assistance for Strengthening Development Partner Coordination
in Cambodia, Country Systems in Procurement and Financial Management, Capacity Development Technical
Assistance Supporting Strengthening and Institutional ReformDepartment of Land Transfer of Ministry of Public
Works and Transportation, Project Preparation Technical Assistance for Mekong River Island Connectivity Output,
and Project Preparation Technical Assistance for Urban Water Supply and Sanitation Project.

12
that project DMFs are of varied quality, and notes this weakness was evident even prior to the
bunching of projects in 2012. Some project completion reports (PCRs) indicate little effort was
made in preparing DMFs. A case in point is that of the Tonle Sap Sustainable Livelihoods
Project, where the DMF provided no quantifiable targets against which to measure
performance. 24 In the project validation report prepared for the Tonle Sap Environmental
Management Project, meanwhile, it is said to not have a rigorous monitoring plan and needs
an improved set of quantifiable indicators to measure results.25 In some projects the baseline is
clearly set, but there is no measurement at project completion to show the progress made. The
poverty and income targets in the Northwestern Rural Development Project are a case in
point.26
34.
In terms of matching the levels of attention and resources for projects to the CPS
objectives, there are three areas in relation to institutional factors that deviate from the
directions or emphasis in the CPS: (i) decentralization, (ii) anticorruption, and (iii) resettlement.
The mismatch is found largely in the so-called facilitating sector of PSM (governance). The
support provided from ADB for decentralization could have benefitted from more visible
programming in the relevant sectors where it was active with substantial projects, in particular
water and irrigation, agriculture, education and training, and roads. Additionally, issues of
anticorruption and resettlementboth important in safeguarding ADB projects and
addressing related government systemswere not given adequate or timely attention.
35.
In the case of anticorruption, the Cambodia Resident Mission (CARM) was the first
resident mission to undertake preparation of a governance risk assessment and risk
management plan. This was done in partnership with the government as part of the governance
and anticorruption action plan II framework. ADB joined other development partners in
supporting implementation of the Anticorruption Law passed in April 201027 by strengthening the
capacity of the newly established Anticorruption Unit (ACU) to carry out its mandate. However,
since that time, ADBs relationship with the ACU did not develop sufficiently to allow for
significant engagement.28 While ADB has attempted to prepare good governance framework for
each project, the halting approach to the provision of more direct forms of anticorruption support
(compared to PFM and decentralization initiatives) has not brought a substantial improvement in
outcomes to Cambodia, which Transparency International has ranked 160 out of 177 surveyed
countries on the Corruption Perception Index.29
36.
In another ADB effort to address corruption, it sought to increase the effectiveness of
the National Audit Authority (NAA), in part because it figures as a major risk in the CPS risk
assessment and management plan. 30 The risk mitigation actions presented in the plan
included providing modest support to capacity building in NAA and to consider additional
support for NAAs active involvement in auditing of externally-financed projects. The CPS
24

ADB. 2012. Completion Report: Tonle Sap Sustainable Livelihoods Project in Cambodia. Manila (p. 11).
ADB. 2011. Validation Report: Tonle Sap Environmental Management Project in Cambodia. Manila (p. 10).
26
ADB. 2012. Validation Report: Northwestern Rural Development Project in Cambodia. Manila (p. 5).
27
Footnote 20, p. 2.
28
Capacity development TA (Support to Implementation of Anti-Corruption Law II) at indicated cost of $0.5 million
was indicatively planned for 2013 in the Cambodia 20112013 country operations business plan. This does not
appear to have been implemented. A possible reason was that the forms of support offered by ADB did not match
the ACUs preferred areas for assistance (e.g., equipment support). ADB held the view that the requested
equipment would not appreciably address the ACUs key challenges.
29
Transparency International. 2014. Corruption Perception Index 2013. http://www.transparency.org/cpi2013/results
(accessed 21 July 2014).
30
ADB. 2011. Risk Assessment and Risk Management Plan (Summary). Supplementary document to ADB. 2011.
Cambodia Partnership Strategy: Cambodia, 20112013. Manila.
25

13
reinforced these initiatives and indicated ADBs intent to provide funding for the audit of ADBfinanced projects. There is no account in the CPSFR of how these intentions translated into
programs and how they helped make the Cambodian PFM system more robust. No evidence
was found by the IEM of significant ADB activity in this area. Some effort is seen in the PFM
support provided to NAA under the PFM for Rural Development Program Subprogram 2, but the
effort was minimal and implementation was delayed to 2014. Internal audit processes are being
strengthened in the three rural development ministries, but this effort is making slow progress.31
Strengthening governance arrangements for institutions like the NAA is important, and it merits
more incisive comment in the CPSFR in view of ADBs commitment and the obvious fiduciary
risks. ADBs Office of Anticorruption and Integrity has reported a rising number of investigations
in Cambodia in recent years, which reinforces concerns that insufficient efforts have been
directed to addressing this issue.32 While it is not possible to prevent all integrity violations, ADB
must make more efforts to strengthen the county's capacity to prevent and prosecute corruption
more effectively. At the strategic level, capacity needs to be developed in critical institutions
such as ACU and the NAA. When there is inadequate ownership in these institutions, then ADB
is limited in what can be done, apart from ensuring it has capacity to act when opportunities
arise to implement reforms. Nevertheless, ADB does have control over the projects it finances
and can pay greater attention to designing institutional capacity to support project
implementation and management during the operating period. In part, this will mean raising the
capacity of the implementing agencies and/or executing agencies which manage ADB projects,
helping them to detect and report potential integrity violations. This dovetails with the need to
better understand where vulnerabilities exist, and designing projects that mitigate these risks.
These more short term Governance and Anti-Corruption Action Plan II concerns will need to
be complemented with longer term efforts to strengthen the country institutions that are
concerned with reducing corruption, i.e., audit bodies, ombudsman mechanisms, anti-corruption
units.
37.
On the issue of resettlement, the CPSFR notes the GMS railway rehabilitation project
(2006, 2008) has had problems.33 It does not, however, assess the resident missions potential
contribution to effectively addressing resettlement issues. The CPSFR provides little guidance,
but expresses the hope the new CPS will allocate additional resources to develop expertise in
the resident mission. It also recommends support be provided to develop standard operating
procedures for involuntary resettlement. The IEM considers that a more fundamental
assessment of the resident missions role in addressing resettlement challenges may be
beneficial to mitigate these types of risks. Resettlement issues in the affected project were not
common, but ADB appeared to not appreciate that such issues can draw disproportionate
attention, leading to significant project disruptions as beneficiaries and advocates (well
intentioned or otherwise) seek redress. The project was managed from ADB headquarters, and
it is likely this arrangement contributed to the governments deficiency in effectively managing
the resettlement component. As a result, ADB could not provide the government with more
31

Ministry of Economy and Finance and ADB and its Cambodia Resident Mission. 2013. Memorandum of
Understanding: Public Financial Management for Rural Development Program (Subprogram 2), Manila (midterm
review mission, 16 September11 October 2013. p. 5).
32
This statistics was based on the list of investigations in Cambodia from 2009 and 2013, obtained from OAI in April
2014 as part of validation.
33
The projects resettlement problems arose when resettled populations experienced long delays between the setting
of compensation rates and their ultimate relocation and payout, thus diminishing the value of the payments and
exacerbating the debt loads on the affected families. The projects problems were compounded by poor
management of the payment issue, particularly in relation to project and government communication strategies and
the response to advocacy efforts of third parties, primarily NGOs and the media. For a recent review of the project,
see ADB. 2014. Final Report on Compliance Review Panel Request No. 2012/2 on the Greater Mekong Subregion:
Rehabilitation of the Railway in Cambodia Project. Manila.

14
intensive hands-on support when its resettlement management faltered and became
noncompliant with ADB guidelines and procedures.
38.
The validation acknowledges that ADB has monitored and closely followed up on the
governments obligations. However, this assistance may still be insufficient as the shortcomings
that were overlooked related to the governments implementation of the resettlement plan. The
inadequate treatment of resettlement issues in ADB programs has reduced the potential impact
of the GMS railway rehabilitation. Therefore, it is important for the CPSFR to comment on the
role of the resident mission (and delegation from headquarters) in managing resettlement
issues. A positive step was the resident missions strengthened capacity in resettlement by
recruiting in 2012 an international resettlement and safeguards specialist. The IEM notes a
tendency in the CPSFR toward risk avoidance for Category A projects. This risk avoidance
stance is not in keeping with the anticipated country needs, inasmuch as ADB support is likely
to be pulled toward the faster growing urban areas where Category A resettlement
components are more likely to arise.34
C.

Effectiveness

39.
The effectiveness assessment is based on an examination of the planned outputs and
outcomes in project DMFs and sector-level results frameworks for projects where substantial
progress had been made in project implementation. The validation uses the same approach
used in the CPSFR and adds an overall assessment of effectiveness against the CPS outputs
and outcomes.
40.
The CPSFR is based on a detailed sector-by-sector analysis of projects and includes 14
PCR ratings, 10 of which rate the projects effective. Project delays are acknowledged, but they
are largely seen as delaying the timing of the expected achievement rather than diminishing the
expected outcomes. There is little commentary in the CPSFR on the extent completed facilities
developed with ADB financing are utilized. Only fragmentary information is available in the
PCRs or other project review and evaluation documents.35 In its visits to field projects, the IEM
observed that the facilities were being used as expected (rural roads and dikes and commune
council offices). There is little effort in the CPSFR to determine if outcomes were actually being
achieved, and this may be the reason why the CPSFR used the qualifier likely. 36 The
validation provides a rating of effective. There is a lack of evidence in many cases that the
outputs of approved projects are being fully delivered, or that they are achieving the stated
outcomes. In particular, institutional outputs and outcomes are proving difficult to achieve.
Offsetting this result, the short time covered by the CPS has meant that any of the projects
covered by the CPS have not yet become operational.
41.
Achievement of physical outputs and outcomes. The list of completed and rated
projects that were assessed by the IEM (Table 1) shows that most projects falling into the scope
34

In 2012 ADB prepared a sector assessment and road map and initiated TA relating to urban management. See
ADB. 2012. Cambodia: Urban Sector Assessment, Strategy, and Road Map. Manila; ADB. 2012. Technical
Assistance to the Kingdom of Cambodia for Capacity Development for Urban Management. Manila.
35
For instance the PCR for ESDP II notes that, The computer rooms in the 18 upper secondary SRCs are very well
utilized for classroom teaching of computer subjects. The science laboratories and equipment in these centers are
not universally well managed or fully utilized and, therefore, the results in science education are below
expectations. It does not comment on all infrastructure provided, however, and in the cases of other projects the
extent to which facilities are used is even less clear.
36
The normal rating used in the IED methodology is simply Effective, but when project implementation is limited, the
IED guidance allows for the term Likely Effective.

15
of the validation are rated as effective or highly effective. This finding does not reflect the fact
that some projects have not met their targets due to delays and related escalating costs, poor
quality of outputs, or canceled outputs. Cases mentioned in the CPSFR, or additional cases that
have come to the attention of the validation, include the following deviations (actual versus
targets):
(i)
(ii)
(iii)
(iv)

(v)
(vi)
(vii)
(viii)
(ix)

28% achievement: 10,000 hectare (ha) versus 35,000 ha of irrigated areas

(Northwest Irrigation Sector Project);37
39%, 50%, and 70% achievement: 50 versus 128 health centers, 7 versus 14
renovations of referral hospitals, and 7 versus 10 emergency facilities in referral
hospitals (Health Sector Support Project);38
68% achievement: 10,550 ha versus 15,000 ha of irrigated areas (Water
Resources Management Sector Development Project);39
64% and 75% achievement: 16 upper schools versus 25 existing upper
secondary schools refurbished and 18 versus 24 upper secondary school
resource centers (SRCs) built (Second Education Sector Development
Program);40
76% achievement: 178 versus 235 commune offices; also just 18% versus 75%
of civil registry documents digitized (Commune Council Development Project);41
90% achievement: 205.91 kilometer (km) versus 230 km (Tonle Sap Lowlands
Rural Development Project);42
undetermined: commune-level irrigation projects (number not reported in back-tooffice report) recorded as complete but which are only partially constructed
(Tonle Sap Poverty Reduction and Smallholder Development Project);43
undetermined: safeguarding of core areas in fisheries cancelled (output 2 of
Tonle Sap Sustainable Livelihoods Project);44 and
undetermined: public latrines cancelled (subcomponent of Tonle Sap Rural
Water Supply and Sanitation Sector Project).45

42.
In reviewing project achievements, the CPSFR generally acknowledges the original
outcome targets presented in the CPS. However, its discussion centers on listing project
outputs and does not adequately explain how they compare to benchmarks and targets in the
DMFs. In many cases, conclusions on effectiveness in the CPSFR are not supported with
adequate analysis on availability of facilities, level of usage, or achievement of outcomes. The
following paragraphs summarize the available evidence for effectiveness in each of the key
sectors.

37

Government of CambodiaMinistry of Water Resources and Meteorology. 2011. Completion Report: Northwest
Irrigation Sector Project in Cambodia. Consultant Report. Phnom Penh (4 December, p. 39).
38
ADB. 2010. Completion Report: Health Sector Support Project in Cambodia. Manila.
39
Ministry of Water Resources and Meteorology and Asian Development Bank. 2013. Memorandum of
Understanding: Water Resources Management. Sector Development Project in Cambodia. Manila (review mission,
27 August6 September, p. 3). SERD/CARM update this figure to 10,890, or 73%.
40
ADB. 2012. Completion Report: Second Education Sector Development Program in Cambodia. Manila (p. 3).
41
ADB. 2011. Completion Report: Commune Council Development Project (Phase 2) in Cambodia. Manila (p. 3).
42
ADB. 2013. Back-to-office report: Tonle Sap Lowlands Rural Development Project. Manila (review mission, 7
October).
43
ADB. 2014. Back-to-office report: Tonle Sap Poverty Reduction and Smallholder Development Project. Manila
(review mission, 519 March, p. 2).
44
Footnote 24, p. 11.
45
ADB. 2011. Completion Report: Tonle Sap Rural Water Supply and Sanitation Sector Project in Cambodia. Manila
(p. 4).

16
43.
Transport. This sector was the most important priority identified in the CPS and the
expenditure targets were exceeded by a substantial margin (23%). In part, this was because of
emergency flood damage support. The sector outcomes envisaged in the CPS results
framework were increased movement of heavy goods by road and rail, and improved
interprovincial and regional road and rail connectivity. The CPSFR concludes that quantitative
targets (principally for the connection by paved roads of 100% of provinces and 1 million tons of
railways freight) were unlikely to be achieved (para. 64). This conclusion appears to be
contradicted by the data provided in the updated results framework in the CPSFR, which
indicates that by 2012 100% of provinces were connected and rail freight exceeded 4 million
tons. Problems securing funding for roads maintenance and difficulties in implementing the
GMS railway project suggest there may be further problems with effectiveness in this sector
over the medium term.
44.
Energy. This sector was not a priority identified in the CPS, although it was projected to
account for 10% of the lending identified in the results framework. The CPS energy strategy
aimed to contribute to Increased grid-electricity consumption by more people, particularly
outside of Phnom Penh, for economic and social development. This strategy was directed to
achieving (i) grid expansion to reach 35% of households by 2013 (2009 baseline: 25%), and (ii)
expansion of households supplied from the national grid-electricity network to 1,131,190 by
2013 (2008 baseline: 633,123). Two projects were approved in the current CPS period: the
Rural Energy Project and the Medium-Voltage Sub-transmission Expansion Sector Project. One
ongoing project had been approved in the previous CSP period: the Second Power
Transmission and Distribution Project (2006). The GMS Transmission Project (approved
December 2003) closed early in the current CPS period (May 2011). The transmission lines and
substations from these older projects are largely completed, and capacity building activities to
improve Electricit du Cambodges performance have largely been concluded.
45.
The CPSFR notes the GMS Transmission Project was rated effective by its PCR (2012)
for substantially achieving envisaged outcomes despite significant delays. It foresees that, once
they are completed as planned, the subsequent projects will likely achieve the intended outputs
and outcomes as the projects are well designed and the executing and implementing agencies
are experienced and committed to achieving results.
46.
In terms of the CPS indicators, as of June 2012, the electrification rate through grid
expansion had increased to 35%, thus meeting the first target. The number of households
supplied with electricity from the national grid electricity network had increased to 810,984 in
2011. Although this figure falls far short of the target, as the updated figure referred to 2011, it is
not possible to determine if the target was achieved by 2013.46 The two CPS indicators taken
from the energy sector results framework do not adequately reflect ADBs intention to ensure
that affordable electricity is provided to poor and isolated areas, and in particular to benefit
women.
47.
Water supply, sanitation, and urban development. Water was the third most
important sector defined in the CPS and accounted for 17% of projected lending. At 49%
relative to the original target, there was substantial underspending in this sector. The CPS
strategy for this sector aimed to increase the use of priority infrastructure, and it set targets
exclusively for the Southern Economic Corridor. Urban targets were reduced households
without toilets (to 0% by 2015) and increased household sewerage connections (to 50% by
2015). Rural targets were 50% with access to safe water and 30% access to improved
46

Feedback from SERD/CARM in June 2014 indicates that the number of household reached in 2012 is 992,597.

17
sanitation. The CPSFR acknowledges that the first Rural Water Supply and Sanitation Project
was less effective in achieving expected outcomes. The impact in terms of health benefits is not
evident, unfortunately, as PCR data shows an insignificant change in the incidence of diarrhea
among project households and a higher incidence of diarrhea among project than non-project
households. The CPSFR notes that the Second Rural Water Supply and Sanitation Project
(2009) is progressing reasonably well and is expected to achieve its outputs and outcomes. The
validation received no documentation for the latter project and cannot confirm this forecast.
Focusing on sector outcomes in the CPS, the data on progress achieved that is presented in the
CPSFR is outdated. It incorrectly refers to Cambodia as a whole, making it irrelevant to the set
of CPS outcome indicators. The validation notes that the allocation of ADB funding to this sector
was halved over the CPS period, and it does not appreciably encompass urban areas.
Therefore, the urban targets are unlikely to be achieved, or, if they are in fact achieved, that
outcome will not have been significantly influenced by ADB.
48.
Agriculture and natural resources. This was the second most important sector
identified in the CPS results framework, accounting for 19% of the projected lending. The CPS
sector outcomes were: (i) sustainable natural resource development, management, and
conservation, where forest cover for inland forest was to be maintained (2008 baseline: 59%;
2015 target: 60%); and (ii) improved agricultural productivity, diversification, and
commercialization, with targets for (a) increased paddy yields (2008 baseline: 2.74 tons/ha,
2013 target: 3.00 tons/ha), (b) increased irrigated area (2008 baseline: 1,120,000 ha, 2013
target: 1,245,000 ha), and (c) improved quality and sustainability of rice exports (2009 baseline:
13,000 tons milled rice, 2015 target: 1 million tons milled rice). The two main projects in this
sector defined in the CPS were: (i) flood and drought risk management and mitigation (March
2012); and (ii) climate-resilient rice commercialization (June 2013), which had not yet started at
the time of the review. The Cambodia Flooding 2011: Humanitarian Assistance Project and the
Emergency Food Assistance Project are contributing to the intended sector outcomes by
supplying inputs, including seeds and repairs to irrigation canals, as well as nutritious food for
poor households. Two ongoing projectsthe Tonle Sap Poverty Reduction and Smallholder
Development Project and the Tonle Sap Lowlands Rural Development Projectare reported by
the CPSFR to be progressing well. In the project areas, they will contribute to infrastructure
development (irrigation and rural roads) and provide access to inputs to improve agriculture
productivity and rural livelihoods.
49.
The CPSFR notes that three of five agriculture and natural resources projects
completed during the CPS were rated effective. The Northwestern Rural Development Project
strengthened local participatory planning in the northwest and rehabilitated 525 km of poor
rural roads, linking poorly served rural areas to market towns. The Agriculture Sector
Development Program helped farmers to raise productivity and diversify production by providing
them better access to productive land, irrigation water, and higher-quality seeds and
agrochemicals. The project also strengthened government capacity to establish an enabling
environment. The Tonle Sap Environmental Management Project established 178 community
fisheries organizations with clear responsibility for managing their local habitats in a sustainable
manner while securing a better future through improved livelihoods.
50.
The CPS and its implementation exhibit a strong commitment to the sector, and the
ADB programs are on the whole relevant to the sector outcomes and targets. Project outputs
are largely being achieved. It is more difficult to ascertain if project and sector outcomes are
being achieved due to use of a weak indicator (the inland forest cover target is not relevant),
time periods that do not match (the target for rice export is for 2015 and not 2013), and

18
confusing presentation (a 2013 value for irrigated land is said to be missing, but it is quoted in
the CPSFR results framework update). The paddy yield is listed as 2.85 tons/ha in the
CPSFR, somewhat below the target of 3.0 tons/ha set in the CPS. 47 Despite the unclear
reporting of progress, it appears there has been partial achievement of outcomes related to
boosting paddy yields, expanding access to irrigation water, and exporting rice.
51.
Education and training. This sector accounted for 14% of projected disbursements, of
which only 50% was achieved. The CPS education sector outcomes are secondary education
and TVET graduates w i t h m ore relevant knowledge and skills, manifested by (i) net lower
secondary enrolment from 32.6% in 2009/10 to 47% in 2012/13, (ii) lower secondary
completion from 48.7% in 2009/10 to 52% by 2012/13, (iii) formal training enrollment from
3,700 in 2009/10 to 18,000 by 2015, and (iv) nonformal skills training enrollment from 53,000 in
2007/08 to 210,000 by 2014. ADB has supported the governments education and training
initiatives in a programmatic approach, with the ADB contribution centered on the Third
Education Sector Development Program (ESDP III; approved 2012), which seeks to increase
lower secondary enrolment. The project focuses on (i) education system management and
development, (ii) professional development of teachers, and (iii) strengthening secondary
education. Three other ongoing projects, Strengthening Technical and Vocational Education
and Training (2009), Piloting the Post-Harvest Technology and Skills Bridging Program for
Rural Poor (2009), and Enhancing Education Quality (2007), also contribute to sector
outcomes.
52.
The CPSFR concludes that education programs and projects are likely to achieve their
intended objectives. The CPSFR points to the PCR for the ESDP II to show ADBs successful
contribution to policy reforms; the expansion of lower secondary education opportunities (by
10.2% in the case of national lower secondary enrollment and 10.1% in that of total female
enrollment); and construction of upper secondary schools and school resource centers (SRCs)
that expanded enrollment by 3,898 students, of whom 42% were girls. Most TVET-focused
capacity development activities have been completed, encompassing the construction of food
safety testing laboratories, training of laboratory managers, and training at TVET certificatelevel.
53.
The lower secondary net enrollment target was partially achieved (38% versus 47%), but
the lower secondary completion rate decreased from the baseline of 49% to 41% (versus a
target of 52%). Enrollment in informal skills training increased to 145,272, which was nearly
65,000 (30%) short of the 2014 target. The rather poor performance of the projects against
sector outcomes was not explained in the CPSFR. The modest financial contribution by ADB to
the sector may be one reason, but this alone does not explain the drop in the lower secondary
completion indicator. The following factors may have contributed to the poor performance: (i) the
late implementation of the education and training program in the CPS (allocation of $60 million);
(ii) moving the $30 million ESDP III from 2011 to 2012, and (iii) shifting the second
Strengthening TVET from 2013 to 2014.
54.
Finance. This sector accounted for 10% of lending in the results framework, and the
actual was 33% below target. The CPS strategy for the finance sector foresees a larger, more
efficient and resilient financial system, characterized by (i) the number of microfinance loan
accounts rising to 1.2 million by 2013 (2010 baseline: 1.02 million, (ii) 100% of banks and
47

Subsequent communication with SERD/CARM in the course of finalizing this report reports yields of 3.16 tons/ha.

19
multilateral financial institutions (MFIs) meeting the minimum capital adequacy ratio of 15%
(2010 baseline: 31% of banks and 22% of MFIs), and (iii) the bank average interest rate spread
declining to 10% by 2013 (2010 baseline: 12.7%). The Third Financial Sector Program (FSP
III)subprogram 1 (2011)contributed to (i) enhanced market stability through various legal
and institutional strengthening measures, (ii) improved financial intermediation and confidence,
and (iii) policy and legal work for promoting the interbank market and development of the
insurance industry supported by the government. The second subprogram (2013) intends to
achieve (i) enhanced finance sector efficiency, (ii) maintained stability, (iii) improved confidence
and financial intermediation, and (iv) promotion of good governance. The FSP III supports
implementation of the Financial Sector Development Strategy 20112020.
55.
In view of the past effectiveness of FSP II, the CPSFR concludes it is likely that FSP III
will achieve its intended outputs and outcomes. The FSP series as a whole has assisted the
development of the institutional framework and led to financial deepening. The CPSFR points
out several achievements to substantiate this claim in the main text of the report, but these fall
outside the current CPS results framework indicators or timeframe. The CPSFR update of the
results framework provides data directly related to the above CPS indicators, and it shows
success in achieving two of the three indicators. The microfinance loans account target was met
exactly in 2013 (1.2 million). The minimum capital adequacy indicator has been maintained at
above 15% by all banks and MFIs, even if they have slipped some from the 2010 baseline
(banks down from 31% to 25% and MFI down from 22% to 21% for MFIs). On an even more
positive note, the bank average interest rate spread target was exceeded by 2013, falling from
12.7% in 2010 to 7.1% in 2013, a significant achievement.
56.
The performance of the financial sector projects against the CPS objectives is adequate,
but the linkage between the FSP III DMF, the sector level results framework, and the CPS
results framework is not clear. This makes it difficult to determine ADBs possible contribution.
The FSP III DMF had a more robust target for promoting access to credit (15% of the
population). This was subsequently revised downward in the sector strategy to 12% and then
substituted with a related but more specific sector strategy indicator (MFI loans opened) that
was not an indicator in the FSP III. These linkages matter, as they determine the plausibility of
an ADB contribution to sector outcomes. In this case, FSP III only contributed to the credit
access effort in a significant way through the support provided to a credit bureau. This project
ran into difficulties and delays, and it is a stretch to connect this work to achievement of the
sector and CPS indicator as to the number of MFI loan accounts opened.
57.
Public sector management. PSM accounted for 10% of the CPS results framework
projected loans, and the actual amount exceeded this target by 39%. PSM is viewed as a
facilitating sector, and the targeted outcomes in the CPS were (i) increased subnational
service delivery, entailing (a) more district and municipal administrations delivering basic
services (2010 baseline: 0), and (b) a larger share of district and municipal administration in
public expenditure (2009 baseline: 0%); and (ii) improved public financial management as
indicated by decrease in the net present value of the debtrevenue ratio (2010 baseline:
170.4%). As such, support was provided for decentralization (for better public service delivery)
and improving public expenditure and fiscal management. The CPSFR also lists support for
legal and judiciary reforms, but the PSM sector results framework and the CPS results
framework (and programs) do not address this area.

20
58.
ADB has provided longstanding support for decentralization. The Commune Council
Development Project (phases I [2002] and II [2006]) provided administrative centers and
training for commune councils. Based on the positive results of this early support (most
outputs were achieved), the CPSFR indicates the recent Decentralized Public Service and
Financial Management Sector Development Program (2012) will result in successful
construction of district and municipal administrative buildings in selected rural areas and the
attainment of institutional outcomes. The building program financed by the project loan has not
yet commenced, but the program loan has been disbursed, thereby providing early signals of
government commitment to the intended reforms. Offsetting this result, the CPS indicator of
increased share of district and municipal administration in public expenditure has not yet
been achieved due to the lack of a complete intergovernmental transfer mechanism for
districts and municipalities. This may occur in 2014. As of the end of the CPS period, ADB was
still in the tendering stage for TA designed to support the development of a subnational
finance facility. The CPS indicator and target for district and municipal administrations
delivering basic services was also not achieved. This was due to lack of a finance mechanism
and of a formal assignment of service functions to the district and municipal councils.
59.
In terms of PFM outcomes, the sole CPS target of increased present value of public
sector debt-to-revenue ratio did see a slight increase (from 170% to 185%), but the updated
figure was provided for 2011 rather than the last year of the CPS (2013). The CPSFR does not
explain why an increase in this indicator is foreseen, whether it is beneficial, or if it is the best
way of mitigating an undesired trend. Normally, high levels of external debt (as seen in
Cambodia) would suggest that a lower present value of public sector debt-to-revenue ratio
would be more prudent. This desired direction of change is evident in the PSM sector
assessment results framework, where the ratio is seen to fall (albeit strangely for the time
period 20052010).
60.
The PFM support provided by ADB to Cambodian rural development ministries does
not appear in the CPS results framework. The increased revenues and expenditures as a
proportion of GDP (indicators in the PSM sector assessment results framework) appear to be
more relevant to the ADB intervention, namely Public Financial Management for Rural
Development Program (2010), but these indicators are not discussed in the CPS results
framework. The support provided to the NAA under this program is vital for good governance
in Cambodia and the safeguarding of ADB projects, but it does not emerge as an outcome in
the CPS results frameworks. This probably occurred as the project is only listed as an output
in the sector results framework. Separate TA providing support to implement the Anticorruption
Law does not even make the output level in the sector or CPS results frameworks. This
treatment of ADB governance support, which has important long-term consequences for
Cambodias development, suggests that institutional outcomes are not given sufficient
emphasis in sector and CPS strategies.
61.
Institutional outputs and outcomes. With notable exceptions, and in particular the
support provided in the finance sector, the CPSFR provides few details on the ADB programs
achievements in institutional development. The CPS does not provide institutional development
indicators, and the CPSFR does not review the institutional development indicators in the sector
results frameworks. The validation was not able to review the sector results framework
indicators due to the lack of adequate documentation and to time limitations. Despite these
constraints, a limited review by the IEM suggests that some important institutional outputs and
outcomes were achieved. At the same time, these results are early stage achievements that

21
require further analysis (e.g., regarding the status of farmer water user communities as reported
in the PCR of the Northwest Irrigation Sector Project).
62.
In the cases of several projects, it appears that institutional effectiveness is unlikely to be
achieved, was not achieved at all, or was heavily curtailed. Some examples are provided below:
(i)

(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)

48

Policy conditions for two important laws in the financial sector have not been met,
and the National Bank of Cambodia (NBC) 48 has expressed concerns that these
conditions were premature and undermined the consultative process required
(Financial Sector Program [Subprogram 3]).49
Four sub-decrees were developed as part of the institutional strengthening
program for the water sector but have not yet been promulgated (Northwest
Irrigation Sector Project).50
The training budget for project management was reduced by 50% (Water
Resources Management Sector Development Program).51
Up to 30% of livelihood improvement groups have included significant numbers
of the nonpoor (Tonle Sap Poverty Reduction and Smallholder Development
Project).52
There has been relatively low transfer of skills from consultants to other project
participants and no improvement of horizontal coordination among central
government agencies (Tonle Sap Sustainable Livelihoods Project).53
Water projects reached 859 villages versus planned 1,760 villages (about 49%).
Most water and sanitation user groups were not operating at project completion
(Tonle Sap Rural Water Supply and Sanitation Sector Project).54
Credit bureau was not established, and this initiative was subsequently taken up
by another development partner (TA related to Second Financial Sector
Program).55
Input to NSDP 20142019 using TA was of good quality but late, coming six
months after the governments draft had already been prepared.
There has been no increase in decentralization of responsibility for delivery and
monitoring of the selected education services as anticipated in the Second
Education Sector Development Program.56
Agreement on policy reforms and timelines for functional assignments and fiscal
framework: outputs in the form of draft policies were produced, but the outcomes
were not achieved in the TA for Developing an Institutional Framework for
Decentralization Reforms.57

The NBC raised this concern to the IEM on 20 March 2014.

Government of Cambodia and ADB. 2013. Memorandum of Understanding: The Consultation Mission for CAM:
Third Financial Sector Program. Manila.
50
Footnote 37, p. 24.
51
Footnote 39, p. 2.
52
ADB. 2014. Aide Memoire: Tonle Sap Poverty Reduction and Smallholder Development Project. Manila (review
mission, 519 February).
53
Footnote 24, p. 9.
54
Footnote 45, p. 42.
55
Based on information provided by NBC to IEM on 20 March 2014.
56
Footnote 40, p. 24.
57
Based on IEM discussion with H.E. Ngan Chamreoun, Deputy Director, National Committee for Subnational
Democratic Development Secretariat on 19 March 2014. Outcomes mentioned are part of ADB. 2009.
Developing an Institutional Framework for Decentralization Reforms Policy and Advisory Technical Assistance
(PATA). Manila.
49

22
(xi)

Just 69 staff versus 200 projected (35%) at the Ministry of Agriculture, Forestry
and Fisheries trained under the Agriculture Sector Development Program.58

63.
The institutional progress reported in the PCRs and the CPSFR need to be viewed more
critically. Even the substantial reforms supported in FSP I and II depend in part on proper
enforcement (e.g., regulations on money changers, commercial arbitration, consumer
protection), and Cambodia has limited capacity in this respect. In another case, the PCR for the
Tonle Sap Environmental Management Project rated the project effective, and likely
sustainable, due in part to the establishment of community fisheries organizations. The project
validation report for the project endorses the PCR claim that all 178 community fisheries
organizations are still active and operating to supervise and protect their management
boundaries. Other sources of information paint a different picture of the Tonle Sap Project at
the times of preparing the PCR and project validation report. There were contemporaneous
reports that many community fisheries organizations were still not acknowledged officially and
that the poorest groups do not benefit substantially from participation in community fisheries
organizations.59
64.
It appears that some project designs underestimated the associated institutional
challenges and did not implement the proposed reforms sufficiently early in the project to
achieve the project objectives. Many institutional indicators within DMFs and across projects
(e.g., sector indicators) are of poor quality. They either are not focused on the crucial
institutional changes required in the interventions or they do not provide a baseline and
monitoring plan that would be needed to track their changes. Although some DMFs are quite
robust, others have no practical use. For example, the outcome indicator institutional capacity
improved does not identify the target group or capacity gap to be addressed (see the DMF in
the Tonle Sap Rural Water Supply and Sanitation Sector Project).
65.
The CPS and CPSFR tend to highlight loan operations while neglecting TA operations
that are often critical to achieving targeted policy reforms and capacity development. The
considerable investments made through TA under the CPS are not well described in terms of
their expected roles in the sector, and they are barely featured in the CPSFR. The TA for NBC
and the National Petroleum Association provide examples of these types of weaknesses.
66.
Several TA projects have been provided to NBC, which acknowledges that this has
helped it develop capacity. Nevertheless, NBC communicated to the IEM its growing
dissatisfaction with the quality of work undertaken in a recent TA project. In NBCs view, there
has been an erosion of quality in moving from FSP I to FSP II. Although NBCs expectations are
evidently rising as it becomes more capable, there is also a belief at NBC that the quality of
consultants has declined as the work has become technically more specialized and demanding.
NBC noted that in recent years the level of engagement and dialogue with the resident mission
had deteriorated relative to that reported in the 2011 PCR for FSP II.60 NBC has been limited to
holding discussions with monitoring teams at ADB headquarters, and this has led to a
piecemeal approach focused on loan conditions rather than addressing the sectors challenges.

58

ADB. 2011. Completion Report: Agriculture Sector Development Program in Cambodia. Manila (p. 19).
See T. Blomley et al. 2010. Review of Community Forestry and Community Fisheries in Cambodia. Report
prepared for the Natural Resource Management and Livelihoods Programme. Phnom Penh (March).
60
ADB. 2011. Completion Report: Second Financial Sector Program Cluster in Cambodia. Manila (p. 10).
59

23
67.
In the case of the National Petroleum Association, ADB provided TA support in 1996 to
strengthen its institutional and legal framework,61 but no TA completion report can be found for
this project. The TA for the second effort (TA 4901) was approved in 2006 and it only mentions
the prior effort in one sentence, without indicating what progress was made or lessons
learned.62 The TA completion report for the second TA showed the project ran 33 months over
its original closing date. It reports some serious difficulties and few results while concluding that
there should be more close consultations with the executing agency and ADB team in project
preparation so that the executing agency has full ownership of the project and is committed to
implement the changes.63 A lack of institutional memory and the TAs supply-driven nature are
evident in this effort, and no doubt these contributed to an overly ambitious and inadequate
design.
68.
In summary, the NBC and National Petroleum Association examples, among other
indications (such as shortcomings in institutional indicators and lack of data on achieving
outputs and outcomes), suggest that institutional strengthening in the Cambodia ADB program
is not receiving the attention required in terms of good practices in the areas of design,
monitoring, and reporting.
69.
Taking into account all of the aforementioned points on physical and institutional outputs
and outcomes, the validation concurs with the CPSFR that most outputs are being delivered as
planned, albeit with the delays indicated in the previous section. The validation notes, however,
that the CPSFR has not made a strong enough case for the achievement of outcomes, and
particularly in the case of institutional outcomes. As a result, the validation rating of effective
refers largely to achievement of outputs rather than outcomes.
D.

Efficiency

70.
The efficiency criterion assesses progress in implementation and the expected or
subsequently observed cost-effectiveness and investment efficiency in resource use. The
CPSFR accurately reflects the hurdles encountered in the project implementation process.
Delays and their causes are noted in several projects. Drawing from PCRs and some project
review mission results, the CPSFR notes that most projects have been rated as efficient. The
validation assessed efficiency by drawing on the reconstructed table of rated projects (Table 1),
and selected project review mission reports (back-to-office reports and aide memoires or
memoranda of understanding) (Table 2). The IEM found significant delays in implementing
projects occurring in sectors deemed priority by ADB. These projects often demonstrated
additional shortcomings, such as lack of economic analysis. These findings point to a rating of
less than efficient.
71.
Program implementation. The CPSFR assessment draws in part on the efficiency
ratings of 14 PCRs, 11 of which were closed before the start of the CPS. As mentioned earlier,
the scope of the validation was broadened to include any project active during 20092013. This
revised scope is broader than the set of projects covered by the CPS, but it nevertheless
excludes some of the PCRs referred to in the CPSFR. While the scope of projects is slightly
61

ADB. 1996. Technical Assistance to the Kingdom of Cambodia for Strengthening the Institutional and Legal
Framework for the Energy and Mineral Sectors. Manila.
62
ADB. 2006. Technical Assistance to the Kingdom of Cambodia for Institutional Strengthening of the Cambodian
National Petroleum Authority. Manila (p. 3).
63
ADB. 2011. Technical Assistance Completion Report: Institutional Strengthening of the Cambodian National
Petroleum Authority. Manila (p. 2).

24
different, this does not alter the pattern of ratings where the majority of projects are rated by the
PCRs as efficient.
72.
The CPSFR reinforces this positive view, noting that all policy-based lending projects
(program loans) were completed on time and that the majority of policy conditions were met as
planned or with little delay. The CPSFR balances its positive findings with those of the joint
portfolio review, which identifies the impediments to portfolio performance, namely (i) lack of
advance actions, particularly in the three rural development ministries; (ii) slow procurement and
inadequate use of procurement tracking forms; (iii) resettlement issues; (iv) overburdened
government project managers with more than one ADB-financed project; and (v) designing
overly complex, decentralized projects without having adequately assessed the capacities of
subnational administrations to manage the projects.
73.
The validation concurs with the joint portfolio review findings as presented in the
CPSFR. The weaknesses enumerated by the joint portfolio review provide an explanation of
why many of the projects active in the 20092013 period experienced considerable delays,
often resulting in one or more extensions of project closing dates. The national election period in
2013 also caused many months of delays for many projects newly approved from 2012 that
were in the procurement stage. It is likely that the effects of the bunching of project approvals in
2012 exacerbated the impact of the elections, as in many cases key procurement processes
had not been finalized. Using data from a variety of sources, Table 4 was prepared by the
validation to show how widespread the delays have been in the Cambodian portfolio. This table
is not complete, but it does provide evidence of the significant delays in implementation.64
Table 4: Projects Active in 20092013 Encountering Implementation Delays
Loan/
Grant
2052

Project
GMS Transmission Project

2376/
G0092

Tonle Sap Lowlands Rural

Development Project

2539

GMS: Cambodia Northwest

Provincial Road Improvement
Project
Tonle Sap Poverty Reduction and
Smallholder Development Project
Water Resources Management
Sector Development Program
Tonle Sap Sustainable
Livelihoods Project

24 Aug 2009

Provincial Roads Improvement

Project
Decentralized Public Service and
Financial Management Sector
Development Program (Project
Loan)
Medium Voltage SubTransmission Expansion Sector
Project

16 Dec 2011

2599
2672
G0034/
G0035
2839/
8254
2887

2979/
8264

64

Approval
Date
15 Dec 2003
Dec 2007

8 Dec 2009
23 Sep 2010
31 Dec 2010

Delay, Reasons and Impacts (if known)

1-year delay in loan effectiveness; late signing of loan
agreements and difficulty in obtaining government
approval of the legal documents.
1-year delay due to difficulty in channeling funds to
implementing agencies; as a result of delay, less than
50% of agribusinesses created so far.
3-year delay (may be cancelled) in cross-border
facility, due to land acquisition difficulties.
Start-up delay; no reason reported in recent back-tooffice report.
15 months or more of delay; physical subprojects
have yet to start.
18-month delay in recruiting consultants, due to
executing agency and lead consultant capacity, as
well as change in ADB project officer.
9-month delay in early stage of project.

13 Sep 2012

1-year delay in recruiting consultants to organize

design of district offices and procurement approach
for district Subnational Administrations.

14 Dec 2012

11-month delay to attain loan effectiveness.

The IEM had also hoped to gauge the impact of delays by determining how many projects experienced one or
more extensions, but the resident mission did not respond to this information request.

25
Loan/
Grant
TA 4645
TA 4901

Project
Restructuring of the Railway in
Cambodia

Approval
Date
14 Sep 2005

Delay, Reasons and Impacts (if known)

3.5-year delay; several causes, including delay in
obtaining a concessionaire. Cost increased by 57%
to complete the technical assistance work.
2.8-year delay due to poor consultants having to be
replaced and delayed achievement of outputs.

Institutional Strengthening of the

18 Dec 2006
Cambodian National Petroleum
Authority
TA 4999 Financial Sector Program II
6 Dec 2007
6-month delay to allow for achieving project outputs
Implementation
TA 7185 Key Policy Triggers of Sub
5 Dec 2008
4-month delay; no explanation.
Program 3 promoting economic
diversification
TA 7488 Support for the Preparation of
11 Dec 2009 1-year delay, to allow for achieving project outputs.
Harmonized Sector Assessments,
Strategies, and Roadmaps for
Cambodia
CDTA
Mainstreaming Climate
1 Oct 2012
Still forming administration team in March 2014.
8179
Resilience into Development
Planning
ADB = Asian Development Bank, CDTA = capacity development technical assistance, GMS = Greater Mekong
Subregion, TA = technical assistance.
Source: Independent Evaluation Department.

74.
There has been a lack of coordination between related ADB-financed TA. This has led to
suboptimal results in some cases, as noted in the case of institutional strengthening at the
Ministry of Water Resources and Meteorology under the Northwest Irrigation Sector Project.65
75.
In recent years, some government partners and NGOs partnering with ADB have noted
that ADBs procedures and requirements have become more rigid, which runs counter to the
long-held view in Cambodia that ADB is flexible in its style of assistance.66 This increasing
rigidity in ADB procedures is seen by some NGOs and officials as leading to delays and placing
excessive burdens on government and the NGO community. Many NGOs have experienced
difficulties complying with ADBs documentation requirements or financial conditions when
accessing ADB loans. There are complaints from various parties, and government agencies in
particular, that harmonization among development partners caused additional rigidity of rules
and procedures (e.g., in procurement). These problems are not unique to Cambodia, and reflect
the findings of ADB surveys in other countries. 67 In many cases these rigidities are arising due
to stringent safeguards and procedures pursued and can only be addressed in a broader
context than the CSPFR validation. Nevertheless, the point still remains that these procedures
create significant time and cost delays that are negatively impacting on efficiency, and in cases
such as the Cambodia Railway project, they have not achieved their stated goal.
76.
Economic rates of return. The CPSFR notes that at the design stage the ADB
interventions approved in the CPS period were justified in terms of expected financial returns
and/or expected costs and benefits. The reports and recommendations of the President for the
four policy-based lending programs (finance, education, economic diversification, and
decentralized public service) estimated that the expected program benefits would far outweigh
the associated adjustment costs. Six approved projects (in roads, rural energy, medium-voltage
sub-transmission, town development, flood and drought risk management, and rice
commercialization) showed estimated economic internal rates of return (EIRRs) greater than the
65

Footnote 37, p. 20.

As reported in Economics Today. 2012. Promoting Growth, Tackling Inequality. 1723 December. p. 20.
67
ADB. 2013. ADB Perceptions Survey Multinational Perception Survey of Stakeholders 2012. Manila.
66

26
threshold rate of 12%. Projects implemented in the 20092013 period showed favorable rates of
return or cost-benefit analysis.68
77.
The validation accepts CPSFR findings on EIRRs, but it notes several projects
experiencing delays of about 1 year have subsequently faced cost increases. For instance, the
decentralization project 69 saw a delay in the procurement of consultants to design district
offices. As a result of project delays and cost overruns, it is likely that only a maximum of 34 of
the planned 40 district offices will now be built under the decentralization program.
78.
Moreover, design work in some projects at preparation stage has not yielded appropriate
cost estimates. This has led to unexpectedly higher project costs for infrastructure, and that will
reduce expected returns. For example, the governments completion report for the Northwest
Irrigation Sector Project notes the cost per hectare of rehabilitating irrigation works turned out to
be twice that projected in the report and recommendation of the President. 70 In another
example, increased costs in the Water Resource Management Sector Development Project led
to a reduction by one-third of the area that was originally planned to be covered under the
project.71
79.
For some projects, DMFs were not prepared that would yield data reasonably necessary
to update an EIRR estimate or project costs at project completion. The Tonle Sap Sustainable
Livelihoods Project is one example demonstrating this shortcoming, and in this case it is not
possible to compare actual results with EIRRs at appraisal. Similarly, the economic analyses
used to justify the Tonle Sap Environmental Management and Northwestern Rural Development
projects do not provide baselines that could be used to assess actual project impacts.72
E.

Sustainability

80.
The CPSFR reviews the sustainability of the program by examining, on a sector basis,
issues of ownership and commitment, design quality (where relevant), cost recovery or
operation and maintenance (O&M) financing arrangements by the government, and institutional
capacity. The CPSFR rates the CPS implementation as likely sustainable.
81.
The CPSFR did not systematically address the sustainability dimensions in each sector.
As a result, the validation makes its assessment based on the CPSFR, relevant PCRs, and its
own review of selected projects documents. In terms of PCR ratings, the validation finds that for
11 relevant projects, 64% (7) were rated likely sustainable. However, these project ratings must
be treated with caution, as some PCRs do not provide adequate justification for sustainability
ratings.73 Based on this assessment and other evidence presented in the CPSFR and selected
project documents, the validations assessment rates ADBs program to be less likely to be
sustainable.

68

In some projects, EIRRs reached 4060%.

ADB. 2012. Proposed Programmatic Approach, Policy-Based and Project Loan for Subprogram 1, and Technical
Assistance Grant; Kingdom of Cambodia: Decentralized Public Service and Financial Management Sector
Development Program. Manila (approved in August 2012).
70
Footnote 37, p. 10.
71
Footnote 39, p. 3.
72
Footnote 25, p. 6; footnote 26, p. 7.
73
This was pointed out in the project validation report (2011) in the case of the PCR for Tonle Sap Environmental
Management Project (closed in September 2009).
69

27
82.
In making its assessment, the validation conducted its analysis according to the
sustainability dimensions defined in the IED validation guidelines and with an additional
dimension of environmental sustainability.
83.
Cost recovery and recurrent costs in project loans. The CPSFR assesses the
Cambodian portfolio in terms of cost-recovery measures, but the conclusions are not supported
by the analysis.
84.
The CPSFR acknowledges the uncertainty of achieving sustainability in the road sector
due to insufficient funding for maintenance. ADB has made a significant investment in the road
sector over time, helping the government to construct 2,700 km of rehabilitated road network.
This constitutes an asset value of about $800 million. Nevertheless, ADB recognizes that the
network is deteriorating rapidly because of a lack of adequate road maintenance combined with
rapidly growing traffic. 74 ADB has highlighted the neglect of routine maintenance on many
occasions, and during the IEM the government agencies and ADB staff confirmed this
widespread concern. ADB reports, prepared jointly with the government in many cases, confirm
the lack of funds for road maintenance. 75 Road degradation is exacerbated by a lack of
regulation or its enforcement in areas such as the unchecked use of inundated roads by heavy
vehicles. In a back-to-office report for the ongoing Provincial Roads Improvement Project, it was
noted that road sustainability is at risk from deteriorating (not maintained) weigh station
equipment in the project area. While this equipment was funded by the government, its neglect
could lead to poor axle load control on a road being improved by ADB financing. 76 The
validation could not find any evidence to suggest that ADB had prepared a response to this
challenge.
85.
The CPSFR does not address tariffs issues in the energy, transport, and water utility
sectors. Project documents examined by the IEM suggest these are important for the
sustainability of project outputs and outcomes. The issue of tariffs is raised in several projects.
Specifically for the energy sector, the extension of the grid (as in the GMS Transmission
Project) promises to link rural users to a cheaper source of electricity.77 The outlook for transport
and water are less positive, and will need continued vigilance as ADB extends its support:
(i)
(ii)

74

The Greater Mekong Subregion Southern Coastal Corridor Project commits itself
to assessing the tariffs that will be put in place to sustain the enhanced transport
corridor linking Cambodia to Vietnam.78
The Water Resources Management Sector Development Program states that
more effortbeyond the initially foreseen time period of 1 yearwill be needed
to support farm water user committees to gain capacity to collect and administer
irrigation service fees.79

ADB. 2007. Report and Recommendation of the President to the Board of Directors: Proposed Road Asset
Management Project. Manila (p. 1).
75
For instance, ADB.
2013 Memorandum of Understanding: Joint Review for the Flood Damage Emergency
Reconstruction Project. Manila (25 November13 December) notes that visited roads had not received routine
maintenance.
76
ADB. 2014. Back-to-office report: Provincial Roads Improvement Project. Manila (review mission, 1731 March,
p. 3).
77
ADB. 2012. Completion Report: Greater Mekong Subregion Transmission Project in Cambodia. Manila (p. 1).
78
ADB. 2007. Report and Recommendation of the President to the Board of Directors: Proposed Loans Greater
Mekong Subregion Southern Coastal Corridor Project. Manila (p. 16).
79
Footnote 39, p. 5.

28
86.
In the Second Education Sector Development Program (ESDP II), the PCR notes there
is uncertainty as to the availability of funds for maintenance of those schools built, especially in
the capacity of school managers to implement preventative maintenance pertaining to SRCs. It
warns that very well equipped SRCs will be expensive to run and maintain, and this further
adds to sustainability concerns.80 This shortcoming appears to stem from weak design, where
the SRC design did not take into account the recurrent expenditures that were likely to be
needed to be allocated to maintain these assets. The concern for maintenance funding in the
ESDP II extends to the sustainability of the schools, as it is unclear whether the government will
allocate the funds needed for maintenance. It is a concern that the issue of maintenance
funding adequacy was only raised at project completion and was not addressed as part of the
design (in terms of project agreements or associated TA designed to support solutions to
address this problem). Recently the government has been influenced by ADB to pledge
maintenance funds of $8,000/SRC, but the high cost poses a challenge to follow through on this
commitment.
87.
Other project documents present similar concerns about sustainability. The validation
report for the Tonle Sap Environmental Management Project noted the formulation and design
for the project did not adequately assess the risks associated with continued government
support. Specifically, the validation report stated that the lack of financial resources is still
affecting the smooth functioning of the Tonle Sap Biosphere Reserve.81
88.
Fiscal and political commitment to reform policies in program loans. The CPSFR
refers to recurrent expenditures at a sector level in two instances, noting large annual increases
in the national TVET budget and some progress toward reaching the desired recurrent expense
target for education (16% against the target of 21% in 2013). Otherwise, the CPSFR is silent on
the availability of maintenance funding in other sectors and it does not provide project-level
information on the fiscal commitments required to sustain project-related infrastructure and
services.
89.
Political stability is briefly touched upon in the CPSFR, which states that it has facilitated
growth. The validation notes that the political situation became less stable in late 2013 (and
early 2014). In terms of ADB operations, the validation does not support the statement in the
CPSFR that there have not been policy reversals in areas supported by ADB. It is not common
for governance initiatives to be directly blocked by formal policy reversals. In most cases,
policies with narrow support and low political commitment are subject to protracted delays. ADB
supports the policy of decentralization in Cambodia, for example, and yet progress on
implementing this policy has been slow. In view of these cases, the rating of likely sustainable
presented in past PCRs (e.g., as seen in Loan 1953 for the Commune Council Development
Project) used in the CPSFR to arrive at its overall rating for the sustainability criterion, is not
convincing.
90.
Institutional and human resource arrangements in support of sustainability. In
terms of institutional capacity, the CPSFR notes that nearly all ADB-funded projects include a
component for developing institutional project management capacity. The support provided to
develop standard operating procedures for externally financed projects is an important
contribution toward attaining this objective. However, the validation sought evidence for a
broader approach to strengthening country systems that goes beyond the predominant concern

80
81

Footnote 40, p. 11.

Footnote 25, p. 8.

29
of Governance and Anticorruption Action Plan II with ensuring smooth implementation and
probity in ADB-financed projects to supporting sustainability of development impacts.
91.
Much of the institutional support provided in the financial sector aims to strengthen
country systems. Similarly, the PSM program for PFM and decentralization seeks to facilitate
reforms and strengthen country systems. The joint analytical work on governancein PSM and
across other sectorsunderpinning the CPS also falls within this category. These initiatives
have seen a limited measure of success. These governance-oriented activities could potentially
have a direct impact on the sustainability of most of ADBs loans, which are oriented to the key
priority areas of Strategy 2020 (and especially infrastructure).
92.
Despite these linkages, the institutional efforts of ADB to promote sustainability in the
infrastructure sectors within sector-based operations are not promising. Some ADB projects
have been funding road maintenance, both routine and periodic, but this form of support is
limited and unlikely to resolve the underlying problems. This outcome suggests there has not
been sufficient appreciation and technical support provided over the last decade for developing
maintenance systems and sustainable financing mechanisms.
93.
Beyond the issue of financing, there is a need in some sectors to address capacity for
technical organization. This gap is evident in a statement of the PCR for ESDP II relating to
demand-driven vocational training: a critical element in sustainability will be the capacity of
provincial training centers (PTCs) to cater to this demand, especially in delivering new and
relevant training in more sophisticated technical skills. The PCR is rather pessimistic in this
regard, concluding that, To date, there does not appear to be widespread instances of PTCs
meeting these types of fee paying demands, or any innovative publicprivate training
partnerships being formed.82
94.
The institutional concerns (merging with legal framework issues) are clearly
demonstrated in the Northwestern Rural Development Project, where small-scale civil works
have been turned over to village committees which have taken ownership of the assets and
responsibility for their O&M. As the PCR states without sustained O&M funding, these project
facilities are likely to deteriorate over time. The O&M of small infrastructure is not generally
carried out by communes and villages.83
95.
In part, the sustainability challenge needs to overcome a political bias to build rather
than repair assets. There are perverse incentives in the government that make it difficult to
counter this bias, which results in poor decisions and results. In the Tonle Sap Rural Water
Supply and Sanitation Sector Project, for example, ADB did not press the Ministry of Rural
Development to deal with water systems that were in disrepair. Instead, that ministry
emphasized the construction of a new water facility. The focus on contracting and installation of
new hardware led to the neglect of the crucial behavior change and water use and hygiene
education activities. Moreover, fewer installations were made operational since the project did
not favor the more cost-effective rehabilitation of existing but nonfunctioning wells.84
96.
The neglect of sustainability indicated in the Tonle Sap Rural Water Supply and
Sanitation Sector Project is also evident in the estimate presented in the governments PCR that
only 30%40% of water and sanitation user groups were still functioning at project completion.
82

Footnote 40, p. 11.

Footnote 26, p. 5.
84
Footnote 45, p. 7.
83

30
While the project trained provincial department of rural development officers to provide
continued technical support to water and sanitation user groups, the PCR notes that the
department does not appear to be playing this role. 85 The Ministry of Rural Development
confirms that continued functioning of the user groups is unlikely.86
97.
Sustainability is also endangered by the relative neglect of institutional development to
support road works in ADB projects, as compared to physical implementation. A capacity
development activity (outsourcing) of the Road Asset Management Project is more than 4 years
late. 87 The road asset management component of the Rural Roads Improvement Project
(approved in 2011) did not prepare its inception report until February 2014, a delay of 3 years.88
Similar delays are seen in the Northwest Irrigation Sector Project, where capacity development
and institutional strengthening assistance provided to the farmer water user committees was not
provided until late in the project life cyclewith corresponding endangerment of sustainability.89
98.
Legal and policy arrangements in support of sustainability. In terms of policy
commitments, the CPSFR specifically points to the education sector as exhibiting strong
ownership of reform policies. In practice, ADB has worked closely with the government for many
years in several other sectors, indicating there has been substantial government ownership of
interventions across all these sectors. In several sectors, such as finance and decentralization,
ADB has provided considerable support for legislative and regulatory reform. Although these
frameworks are critical to anchor the necessary improvements in downstream institutional
capacity development, the existence of legislation and high-level policies does not always signal
real political commitment and the progress that might be expected by reviewing existing laws
and policies. The slow progress on civil service reform and corruption exemplify this reality.
99.
Environmental sustainability. The CPSFR notes that the CPS focused on
environmentally sustainable growth, and more than 50% of the approved projects supported this
objective. Unfortunately, no details are provided in the CPSFR on how this objective is being
pursued and whether it is being achieved.
F.

Development Impacts

100. The CPSFR assesses the prospects that the approved, completed, and ongoing projects
and programs will contribute to development impacts and provides a rating of likely. 90 It
justifies this rating by presenting highlights of the countrys development performance and then
discussing the likely contribution of ADB assistance. This approach does not accord with the
scope set out in this validation, which only reviews the set of projects active in the 20092013
period. The scope of the validation raised some challenges in determining development impact.
It is difficult to obtain a clear view of impact due to the rather short time period; the bunching of
approvals in 2012 (leaving little time for implementation); a limited set of self-assessed and/or
evaluated projects; and deficiencies in the CPS and CPSFR results frameworks update,
particularly with respect to the achievements of outcomes.
85

Footnote 45, p. 10.

Footnote 45, p. 42.
87
ADB. 2014. Back-to-office report: Road Asset Management Project. Manila (8 April, p. 1).
88
ADB. 2014. Memorandum of Understanding: Rural Roads Improvement Project. Manila (review mission, 310
February. p. 3).
89
Footnote 37, p. 1.
90
The IED methodology normally does not use the term likely in assessing development impact. Rather it uses a
range of modifiers related to whether development impact is satisfactory (highly satisfactory, satisfactory, partly
satisfactory, unsatisfactory).
86

31

101. For these reasons, the findings and conclusions in this assessment on impact are
tentative. In some sectors and subsectors, a plausible case can be made for eventual and
meaningful development impact against sector outcomes in the CPS (agriculture and natural
resources, finance, PSM [decentralization]). In other sectors altogether amounting to more than
half of ADB loans, however, it is not straightforward to support this view (transport; water supply,
sanitation, and urban development; energy; education and training; PSM [PFM]). Considering
the large portfolio size of these sectors, the validation assesses development impacts to be less
than satisfactory.
102. Country-level development. There is sufficient evidence in the CPS, CPSFR, and
other sources compiled by the IEM to show that Cambodias development over the period
20092013 has made significant gains. Growth has been quite high (close to 7%), after
recovering from a fall following the global financial crisis to 0.1% in 2009. Poverty has been
substantially reduced, at a pace of over 1% per annum. Sector indicators show considerable
progress in developing capacity to support future growth. For instance, rice exports rose from
13,000 tons to 500,000 tons. The electrification rate climbed from 25% to 34%. Other
improvements were more incremental. A few indicators declined, as in the case of completion
rates for secondary education, which fell from 49% to 41%.
103. The CPSFR does not highlight progress on the governance front. Improvements have
been rather modest, as shown in the progress on World Governance Indicators (Figure 1) and
the Country Performance Assessment score produced by ADB (Table 5). As the data extends
only to 2012 for the World Governance Indicators, the political turbulence of 2013 is not
reflected in the data. That would reduce some scores. The political stability score in particular
would decline, and perhaps also that for voice and accountability. Although there has been
some positive movement, the fact that the scores are relatively low indicates that a great deal of
work still needs to be done to strengthen institutions.
104. Challenges in assessing the ADB contribution to development impacts. The
CPSFR relies on an extensive list of sector-based outputs and activities to build a case
confirming an ADB contribution to development impact. Many of these outputs appear in the
effectiveness and sustainability sections. On the basis of this analysis, the CPSFR concludes
that ADBs contribution to development impact is likely. However, the CRSFR analysis puts
too much emphasis on outputs and activities. In principle, all development interventions will
contribute to intended higher-level outcomes. The key issue is whether this activity has been
meaningful or satisfactory in view of the cost of resources employed and the expected
contribution to the countrys development.
Figure 1: Cambodias Performance against World Governance Indicators, 20092012

Source: World Bank Worldwide Governance Indicators, http://info.worldbank.org/governance/wgi/

32
Table 5: Cambodias Country Performance Assessment Scores, 20092012
Economic
Structural
Policies for Social
Public Sector Management
Portfolio
Management
Policies
Inclusion and Equity
and Institutions
Performance
CCPR
2009
4.2
3.8
4.0
3.5
3.5
13.5
2010
4.2
4.0
4.0
3.7
3.5
14.4
2011
4.3
3.8
4.0
3.8
3.5
14.7
2012
4.7
4.2
4.1
4.0
3.0
15.5
2013
4.7
4.0
3.9
3.9
3.0
14.8
CCPR = composite country performance rating.
0.70
x
Note: Range of possible scores for first five clusters is 16. The CCPR is computed as (policy and institutional rating)
0.30
(public sector management and institutions average) x (portfolio rating) , where the policy and institutional rating is
the unweighted average of the scores for economic management, structural policies, and policies for social inclusion
and equity. Cambodias 2013 CCPR score of 14.8 positions it between a relatively well-scoring Vietnam (17.6) and lowscoring Pakistan (12.5). The average for all rated non-Pacific developing member countries is 15.3.
Source: Asian Development Bank.

105. The CPSFR does not provide a convincing analysis of the linkages between the specific
outputs and outcomes stated in project DMFs to the sector-wide results frameworks that would
support claims of contribution to impacts.
106. For the CPSFR to demonstrate plausible links between DMFs and sector results
frameworks, the CPS results framework would require better data up to 2012/2013 to make a
comparison with the baseline of the CPS. In practice, the CPSFR progress update either lacks
data or it uses data that does not match the scale or time period being reviewed. In some cases,
the support offered in ADB programs cannot be expected to have any discernible effect on the
higher-level outcome set in the CPS. For example, the maintenance of the forest cover
indicator, which is only affected by a small biodiversity project, could only affect the quality of
existing forest cover and not the entire relevant area.
107. In a more rigorous treatment of development impact, the CPSFR would have explained
why ADB efforts in a sector or subsector have not kept sector performance from declining (as
occurred for lower secondary education completion rates, where ADB has substantial
programs).
108. Ultimately, the CPSFR is not the best entry point for making improvements to data
quality. Benchmarks and robust data need to be generated at the project levelinitially at the
project design stage and then aggregated to the sector level. The PCR of the Tonle Sap
Environmental Management Project provides an example of the difficulties arising from the
current project design arrangements. The validation report stated that the PCR did not provide
a rating for impact. It explained that identifying the projects impact on socioeconomic and
environmental conditions would require pre- and post-project assessments, which were not
provided for in the project design.91 If a projects design includes a robust baseline, then it is
possible to construct robust sector results frameworks which can be used to track progress
during the life of the CPS and be accurately represented in the CPS results framework.
109. In practice, to achieve widespread improvement in the sector and CPS results
frameworks, it will be necessary to improve country systems for monitoring and evaluation. ADB
has committed at times to develop this type of system, but it has pursued this objective in an ad
hoc fashion. 92 A robust monitoring and evaluation system requires government vision and
91
92

Footnote 25, p. 7.
It is, for instance, provided to three rural development ministries as subcomponents or activities in the Public
Financial Management for Rural Development Program (Subprogram 2), the Health Sector Support Project, and
the GMS: Rehabilitation of the Railway in Cambodia Project.

33
sufficient resources and persistence in support from ADB and other development partners.
110. Portfolio view of ADB contribution to development impact. Notwithstanding the
challenges outlined above, it is possible tentatively to offer some judgments as to the
development impact of ADB support on portfolio-wide and sector bases.
111. In terms of the overall portfolio, the expectation of an ADB contribution needs to be
commensurate with the financial value of the portfolio, which totals to $555 million approved
over the CPS 20112013 period in the forms of loans, grants, and TA. The $185 million annual
average level of loans is a modest proportion (7%) of the governments estimated annual
average budget of $2.83 billion over this period.93
112. The CPSFR states that a total of 36 loans and grants were completed over the past
and current CPS periods. Not all of these initiatives fit into the scope of this validation, but
the combined contribution of the relevant projects is considerable. ADB has helped to build
infrastructure (roads, railways, power transmission, irrigation, and water supply), spurred
agriculture and its exports, deepened the financial sector development, joined a programmatic
effort in the education sector, and supported the business and regulatory environment to
facilitate private sector development and external trade. ADB operations have also promoted
gender mainstreaming, environmental protection, good governance, and regional cooperation
and integration. The following paragraphs provide a sector view of development impact where it
can be identified from available documents.
113. Transport. It is unclear from the CPSFR whether CPS sector targets have been met. It is
evident that specific roads have been improved through ADB-supported projects (e.g., 4,000 km
rehabilitated or upgraded) and railways have been rehabilitated (e.g., 300 km out of 600 km
the distance originally targeted to be rehabilitated). These are important contributions that will
help to improve internal and regional connectivity and move more goods and people. These
improvements will reduce travelling time and costs for businesses and households. Some
support has been provided to strengthen institutions that will be critical to the long-term
sustainability of national and provincial roads (e.g., by introducing asset management
systems). Despite these initiatives, sustainability in the road sector is a serious concern.
114. Energy. The CPS energy strategy assists Cambodia to increase grid-electricity
consumption, particularly outside Phnom Penh. The five projects financed by ADB over the past
decade have contributed to capacity of transmission lines and substations in selected corridors,
thereby linking small towns and forming corridors with a regional reach. Institutional capacity
building activities have been provided to improve Electricit du Cambodges performance.
115. The CPS indicator on grid expansion showed the expected target of 35% had been
achieved. The indicator number of households supplied with electricity lacks recent data that
would allow a definitive assessment (as of 2012 the achievement fell short of the target). These
two CPS indicators do not adequately reflect the ADB intention to ensure that electrification is
provided at reasonable cost to poor and/or isolated areas, and, in particular, to the benefit of
women. The only rated ADB project in the sector shows that nearly equal numbers of
beneficiaries in Phnom Penh (40,000) and poor rural households (50,000) were connected to
the grid. 94 As true for other infrastructure sectors, there are concerns about sustainability,
particularly in relation to agreements with neighboring countries for the supply of electricity
93
94

International Monetary Fund. 2013. Cambodia: Staff Report for the 2012 Article IV Consultation. Washington, DC.
Footnote 77, p. 11.

34
through the newly built transmission infrastructure. Vietnam has only sold 68% of the power it
had agreed to provide through the transmission lines built under the GMS Transmission Project.
The government has voiced its concern that domestic power generation, coupled with imports,
may not be sufficient to sustain the total energy demands of the country at current levels of
economic growth.95 There is a possibility of significant and damaging brown-outs occurring in
the near future within Cambodia.
116. In the scale of its support to the energy sector, the ADB contribution in Cambodia is very
small compared to the estimated $1.37 billion cost of expanding the rural grid.96 Nevertheless,
Electricit du Cambodge notes it has gained considerable capacity through ADBs support. The
CPS is ambiguous about the role of the energy sector within the ADB portfolio. While ADB has
long had an association with the sector, it is no longer clear whether this engagement will
continue. The CPS and the sector strategy forecast that ADB will reduce or end its support for
energy, although it is not clear over what time frame. Despite this ambiguity, the implementation
of energy projects over the CPS period in the amount of $61 million was similar in amount to
levels of lending for some other priority sectors. The long-term impact of ADB assistance in this
sector rests in part on properly situating ADB assistance and devising indicators that more
accurately capture the desired impact.
117. Water supply, sanitation, and urban development. The CPS strategy aimed to
increase the capacity of priority infrastructure in this sector. The program was focused on rural
areas, although targets were set for both rural and urban areas. The lack of relevant data on
progress achieved makes it difficult to assess this sector in the validation. The validation notes
the CPS allocation for this sector was reduced by 49% in the implementation period as
compared with the initial plan. The program did not appreciably address urban areas. This made
achievement of the urban targets either unlikely or not significantly influenced by ADB if in fact
achieved. Some physical outputs of projects in this sector may not be sustained in view of the
insufficient attention given to cost recovery for infrastructure and institutional development. One
such example is the formation of water user groups. Although these factors make it difficult to
assess development impact, they do not in any case support a positive outlook.
118. Agriculture and natural resources. The number of approved operations (16) in the
CPS period and their value ($169.4 million) indicate a strong ADB commitment to this sector.
Although agriculture and natural resources is not a priority sector for ADB, this level of support
reflects ADBs responsiveness to Cambodias development conditions and policy reforms.
Project outputs are largely being achieved, but it is difficult to ascertain if project and sector
outcomes are being achieved. This is due in part to weaknesses in the results framework and
reporting arrangements. Nevertheless, there appears to have been partial achievement of
outcomes related to boosting paddy yields, expanding irrigation water usage, and exporting
rice. The resident missions intent to better support agriculture through a value chain approach
is an effort that was still in its early stages of development during the CPS period. If
successful, the support to this sector could become more effective in the near future and
potentially have greater impact in the longer term. One factor lessening the potential impact of
the ADB program is its focus on rice production. While rice is important to the Cambodian

95

Government of Cambodia. 2012. The Cambodian Governments Achievements and Future Direction in Sustainable
Development. National Report for Rio + 20United Nations Conference on Sustainable Development. Phnom
Penh (p. 19)
96
ADB. 2011. Sector Assessment (Summary): Energy, Country Partnership Strategy: Cambodia, 20112013. Manila
(p. 2).

35
consumer and its export can yield foreign exchange, the governments sector strategy
following its 2010 rice production and export policy is now more focused on diversification. 97
119. Education and training. ADB support for the education sector showed some results
prior to the CPS, as ESDP II had contributed to policy reforms and expansion of lower
secondary education opportunities (accounting for 10.2% of national lower secondary
enrollment and 10.1% of total female enrollment). The subsequent education and TVET
projects have not yet been completed or rated, although they appear to be producing their
outputs. For instance, most TVET-focused capacity development activities have been
completed. These encompass food safety testing laboratories, training for laboratory managers,
and TVET certificate-level training. In terms of the CPS sector outcomes, the lower secondary
net enrollment target was partially achieved (38% versus 47%), but the lower secondary
completion rate decreased from the baseline of 49% to 41% (versus a target of 52%).
Enrollment in informal skills training increased from 53,000 in 2007 to 145,272 in 2013,
although it fell 31% short of the 2014 target of 210,000. The rather poor performance of this
indicator against sector outcomes was not explained in the CPSFR, and it is surprising in view
of the program-based approach uniting ADB and other development partners in this sector.
120. During the CPS period, the education and training support provided by ADB was
closely aligned with the governments Education Strategic Plan 20092013. However, the
level of resources provided by ADB was low. The CPS had allocated $60 million, but the $30
million ESDP III was moved from 2011 to 2012 and the second TVET program was moved from
2013 to 2014. The smaller financial investment reduces the likely impact, and the delay of
projects raises the risk that the ADB program will fall out of alignment with future government
policy.
121. The development impact of the ADB education and training support could be further
diminished by sustainability issues raised in assessments and project monitoring reports. These
concerns relate to educational facilities that are not likely to be adequately financed and
maintained.
122. Finance. ADB has made a significant contribution to support the development of
Cambodias financial sector, helping to establish an enabling regulatory framework and stronger
institutions that will help deepen the sector, make it more stable, and provide credit and other
services to a larger segment of the population. ADB has provided support to the sector for over
a decade in line with government reform plans, including the recent Financial Sector
Development Strategy 20112020. As this validation is concerned with more recent operations,
accomplishments recorded prior to the relevant period are not a reliable indicator as to future
impact of the FSP III (2011).
123. The CPSFR update of the results framework provides data on CPS impact indicators,
showing success in achieving two of the three indicators (see section II.C, Effectiveness), but
the FSP III link to these indicators is tenuous at best. An argument can be made that the impact
of institutional development of the kind provided by ADB in the financial sector accumulates
incrementally and eventually attains important system characteristics (e.g., capacity, stability,
effectiveness). While the achievements of FSP I and II are outside of the validation period, they
provide a good basis for realizing the impacts targeted by FSP III. To achieve this impact,
97

Organisation for Economic Co-operation and Development. 2013. Economic Outlook for Southeast Asia, China and
India 2014: Beyond the Middle-Income Trap (Country Note Cambodia). http://dx.doi.org/10.1787/saeo-2014-en

36
however, ADB will need to engage more closely with its current main counterpart, the NBC, to
determine the future challenges to be addressed. In keeping with the objective of inclusive
growth, it is particularly important to determine the role of NBC versus those of other sector
institutions as the substantive focus of support for the financial sector shifts from issues such as
availability of credit and payment systems to such issues as promoting greater access to credit.
The concerns expressed by NBC about the quality and approach of ADB support could be a
hindrance to effective support (and impact) unless squarely addressed.
124. Public sector management. PSM is presented in the CPS as a facilitating sector, and
support in Cambodia was focused on decentralization and public financial management. ADB
support for decentralization was most apparent in the Commune Council Development Project
(phases I [2002] and II [2006]), and it was focused on constructing administrative centers for
commune councils. The most recent flagship PSM operation is the sector development project
Decentralized Public Service and Financial Management (2012). This project shifted the focus
of PSM support to the construction of district and municipal administrative centers (for the
project) and the attainment of institutional outcomes (program loan). The program loan has
been disbursed, and the construction of centers is expected to begin in 2014.
125. The CPS indicators for decentralization have not been met. The government has not
established an operating financial transfer mechanism for districts and municipalities, and it
has not assigned service functions to district and municipal levels of government. While the
policy conditions of the new program loan have been met in a limited way, they may not
maintain momentum in what is a politically sensitive policy field. In order for the project activity
to occur, the assignment to district and municipal councils of administrative centers adds
pressure to formally assign functions.
126. The CPSFR does not adequately review the work that might be seen as forming an anticorruption cluster. While a CPSFR (or validation exercise) need not account for every project,
the importance of anti-corruption efforts in Cambodia calls for an assessment of the key
projects mounted by ADB. It would need to say something about the effort undertaken in the
Public Financial Management for Rural Development Program (2010) and support to the
National Audit Authority. Similarly, planned TA to support implementation of the Anticorruption
Law should have been highlighted in the CPSFR.
127. Effective public sector governance is critical to Cambodias long-term development.
ADB has undertaken joint analytical work with the government to identify and manage
governance risks. The development impact of the current PSM (governance) effort is not likely
to be effective unless the programs scope is enlarged. For decentralization, this will mean
ensuring cross-sector coverage of this initiative (across ADB-supported projects in relevant
sectors) and continued dialogue on transferring new functions and financing mechanisms to
councils. For PFM operations, this will mean more intensive policy dialogue on governance
risks and engagement with key anticorruption institutions. PSM (governance) operations will
need to be more clearly represented in the CPS results framework and better tracked to
ascertain progress and make adjustments that will ensure effective outcomes and impacts.

37
G.

ADB and Borrower Performance

1.

ADB Performance

128. ADB has sought to be responsive to emerging needs; developed new interventions; and,
in some cases, revised ongoing projects in response to changing circumstances such as those
caused by severe flooding in 2010. For example, the Northwest Irrigation Sector Project added
flood protection works in some areas to its existing program. ADB engaged with the government
when preparing key diagnostic analyses and in preparing the CPS.
129. Similar efforts were made by ADB to coordinate project activities with other partners,
and, in many cases, cooperate through cofinancing projects. It has participated in technical
working groups and used sector-wide approaches to develop financing programs.
130. Internally, the resident mission has strengthened its safeguards capabilities (especially
for resettlement) to deal with the growing resettlement controversy. It assumed responsibility for
the administration of some projects, including projects that needed restructuring to improve
performance. ADB designed good governance frameworks for projects, then monitored these
over time and adjusted project management as necessary.
131. Despite these initiatives, there continue to be problems with quality at entry of projects.
There are perceptions that ADB has not effectively communicated changes in its regulations on
project agreements or procurement, and it has not adequately taken into consideration the
hurdles that NGOs face in trying to access ADB bidding documents and contracts.98 Some of
these perceptions may be unfounded, but if so then the intent of the introduced changes need to
be better communicated to ADBs stakeholders. There appears to be opportunities to strengthen
cross-sectoral themes such as decentralization.
132. Another area of concern is ADBs performance implementing safeguards for projects
against fiduciary risk. More effort and progress is needed to strengthen country systems to help
support ADB project execution. There are also concerns about procurement and the long
timelines associated with project implementation. Delegating additional procurement and
portfolio management capacity to the resident mission has the potential to generate significant
benefits in project implementation.
133. Although experience suggests the resident missions administration of projects has been
beneficial in many cases, delegation often appears to occur midway through projects, when
management problems have already arisen.99 There does not appear to be a clear vision for
strengthening the resident missions capacity and maximizing its role in designing and
implementing projects. Selective strengthening of the resident mission functions (e.g., in the
areas of governance and resettlement) in line with its programmatic commitment is needed to
enhance performance. For instance, an additional resident based governance specialist for
CARM may be needed to support the large portfolio for governance and financial sector reforms
These adjustments would raise resource allocation considerations needing to be reviewed in the
light of other measures, such as to assess the size of the sector and country portfolio as a
whole.
98
99

Communication with NGOs invited to discussion with IEM, Cambodia Resident Mission office, 21 March 2014.
This has occurred, for instance, in the Tonle Sap Sustainable Livelihoods Project, Tonle Sap Lowlands Rural
Development Project, Northwestern Rural Development Project, Second Education Sector Development Project,
and GMS Transmission Project.

38

134.

On balance, ADBs performance was satisfactory.

2.

Borrower Performance

135. The IEM received oral communications that were corroborated in PCRs indicating that
there have been improvements in technical, financial, and management capacities of executing
and implementing agencies. The governments commitment to reform initiatives in areas such
as governance is clearly evident.
136. The government has indicated its commitment to using the financing and technical
inputs of ADB to good effect. The agencies involved in ADB programs have sought to
coordinate with ADB and other development partners.
137. There is still room for improvement in some areas of engagement with ADB.
Opportunities have been missed to align sector support in order to realize cross-sector
objectives, with decentralization policies being a case in point.
138. A series of integrity violations have occurred that raise questions about the adequacy of
country systems pertaining to ADB operations. ADB has not always adhered to its adopted good
governance practices in operations. For example, there has been failure to disclose project
details on websites (e.g., noted in the Tonle Sap Rural Water Supply and Sanitation Sector
Project). Other violations of ADB procedures were noted, such as project borrowing of ADB
funds from the imprest account to finance government counterpart expenditures (seen in the
Tonle Sap Environmental Management Project).
139.

On balance, the governments performance in ADB operations was satisfactory.

H.

Overall Assessment

140. The overall assessment yields a score of 1.4 and a rating of less than successful, as
explained in Table 6.
Table 6: Rating Comparison between CPSFR and CPSFR Validation
Evaluation
Criteria
Strategic
Positioning

CPSFR
Ratings
Highly
Satisfactory

Validation Ratings and

Weighting (Scoring)
Satisfactory
10% (2)

Program
Relevance

Highly
Relevant

Relevant
10% (2)

Effectiveness

Likely
Effective
Likely
Efficient

Effective
20% (2)
Less than Efficient
20% (1)

Efficiency

Main Reasons for Rating Deviations and/or

Changes in Evaluation Nomenclature
Inadequate discussion of how program supported
inclusive growth
Value-chain logic is not well articulated to defend
broad sector allocation (10 sectors).
Lack of clarity in positioning energy sector support
Weak CPS results framework and CPSFR updating
of results framework
Decentralization limited to PSM operations, rather
than being truly cross-sector
Key safeguard issues of resettlement and corruption
did not receive adequate or timely attention.
Weaknesses in DMFs make it difficult to ascertain
attainment of outcomes
Delays and cost overruns
Insufficient EIRR/FIRR analysis
Inability to track performance against DMFs and
results frameworks benchmarks
Perceptions of procedural rigidities among

39
Evaluation
Criteria
Sustainability

CPSFR
Ratings
Likely

Validation Ratings and

Weighting (Scoring)
Less Likely to be
Sustainable
20% (1)

Development
Impacts

Likely

Less than Satisfactory

20% (1)

Overall Rating

Successful

ADB
Performance
Borrower
Performance
CPSFR Quality

Not rated

Satisfactory

Not rated

Satisfactory

Less than Successful

Main Reasons for Rating Deviations and/or

Changes in Evaluation Nomenclature
nongovernment organizations
Concerns on attention to infrastructure operation
and maintenance and its financing.
Concerns most evident in the roads and water
sectors, due to difficulties in achieving institutional
outcomes, such as establishing road asset
management capacity or community-based
maintenance structures
Insufficient attention or results in crucial institutional
aspects that impinge on long-term sustainability
Slow progress in some ADB-supported sectors
Duration of CPS 20112013 is short, even when
extending it to include projects active in 20092010.
Lack of plausible arguments on contributions to
development impacts
CPSFR provides insufficient data on sector and/or
cross-sector impact.
Sectors and subsectors where a plausible case can
be made for meaningful development impact against
CPS sector outcomes: agriculture and natural
resources, finance, PSM (decentralization)
Other sectors and subsectors where a less optimistic
view is supported: transport; water supply, sanitation,
and urban development; energy; education and
training; PSM (public financial management)
With revised weightings, the score is 1.4, which is
on the high end of Partly Successful.

- Greater clarity was needed on a set of projects

encompassed in the review adhering more closely
or departing in transparent way from scope as
required in the validation guidelines.
- It could have furnished more relevant data
(especially institutional and outcomes) for assessing
results, including encompassing the more robust
ASR results frameworks in this effort. There was a
lack of plausible links between project results
achieved and the sector outcomes in the CPS results
framework.
- Adherence of allocations to Strategy 2020 needed
more nuanced discussion.
- Governance issues, especially corruption, could
have been given better coverage.
ADB = Asian Development Bank; ASR = assessments, strategies, and road maps; CPS = country partnership strategy;
CPSFR = country partnership strategy final review; DMF = design and monitoring framework; EIRR = economic internal
rate of return; FIRR = financial internal rate of return; PSM = public sector management.
Source: Independent Evaluation Department.

I.

Less than Satisfactory

Lessons, Issues, and Recommendations

1.

Lessons

141. The validation agrees with the CPSFR that political and macroeconomic stability, a
strong enabling policy environment, and improvements in physical infrastructure were the key
factors conducive to growth. However, there is little evidence presented in the CPSFR to justify

40
the claim that Cambodias growth has been inclusive in the CPS period. The validation supports
the other lessons cited in the review, including (i) the need to prepare for further regional
integration; (ii) the need for ADB to continue to be responsive to country needs; and (iii) the
importance of exploring alternative sources and types of finance, from ADB and the market, to
meet the expanding needs for infrastructure over the next 15 years.
142.

Several lessons can be gleaned from the CPS experience and CPSFR exercise:
(i)

(ii)

(iii)

2.

The case for effectiveness and impact has not been given sufficient attention in
ADB operations. Business process guidelines and internal incentives stress rapid
processing and disbursement. Missed opportunities to design and track important
indicators of outcomes, particularly institutional outcomes, have hindered efforts
to determine success and draw lessons. This has reduced ADBs ability to
influence ongoing projects and guide overall program decisions. The
establishment of clear baselines is an essential requirement for improving project
designs.
ADB is not developing convincing measures on how it will address project
sustainability, particularly in the road sector. This shortcoming is related to
weaknesses in designing institutional outcomes and the lack of attention given to
institutional aspects in monitoring and project completion reports.
Implementation challenges and threats to sustainability arise in part from the lack
of attention paid to capacity development for institutions involved in the
preparation and management of projects. While this preparation activity can
require additional effort in project design and preparation measures, and thereby
possibly extend preparation and implementation schedules, the payoff in capacity
gained can make this investment worthwhile.
Issues

143. While ADB achieved many successes over the validation period, it has yet to show that it
can effectively support the government in some of the more difficult reform and institutional
strengthening efforts.
144. It is clear that governance issues require additional efforts in partnership with relevant
ADB units (e.g., Operations Services and Financial Management Department) to address
fiduciary safeguards at project level. Broader and more sustainable impact on fiduciary issues in
Cambodia will require a longer-term strategy that sees ADB engage more intensively with
anticorruption initiatives and institutions.
145. In terms of the broad impact of its support, ADB is a leading development partner in
Cambodia, as seen in the context of a government dependent on aid and financing.
Nonetheless, there is room for ADB programming to use its leverage and realize synergies
across the portfolio. In the case of the governments decentralization policies, ADB provided
support in a meaningful way in PSM operations, but it did not realize opportunities to support
decentralization in the other sectors where it had a significant presence (e.g., infrastructure,
education). The CPS lists four cross-cutting challenges that will become increasingly important:
(i) environment and climate change, (ii) decentralization, (iii) urbanrural links, and (iv) regional
cooperation. Attaining more linkages and coherence across the portfolio on these cross-sector
issues is a challenge that needs to be clearly addressed in the new CPS.

41
146. The resident missions intention to frame its portfolio in terms of value chains can
potentially provide the portfolio greater coherence. The challenge for SERD is to clearly
articulate this approach to show the linkages across projects, give the portfolio coherence and
greater impact irrespective of individual projects sector designations, and, at the same time,
justify the limited impacts of the projects within each of the affected sectors.
147. A more robust approach in demonstrating the logic of the portfolio structure would also
guard against an overly dispersed portfolio comprised of projects with ad hoc and retrospective
rationales. The portfolio logic should allow ADB to discern whether and how it should respond to
the many government requests that arise from changing circumstances and perceptions of need
over the CPS period. Responsiveness is a valued characteristic of the ADB Cambodia program,
but there is a need for discipline in project selection that is in line with the overall portfolio
rationale. Striking that balance will require better articulation of the portfolio rationale.
148. As a final observation, again relating to the entire portfolio, the weaknesses in the project
DMFs, sector results frameworks, and CPS results framework make it difficult for the
government and ADB to ascertain the progress and success of ADB operations and strategies.
A more determined effort is needed within ADB to fashion robust results frameworks that can be
used to guide strategy and deliver results. Ideally, this effort will be tied to support given to the
government, enabling it to take a larger role in designing project DMFs as well as sector and
CPS results frameworks in a way that strengthens country system-based data and reporting.
3.

Recommendations

149. In line with the issues encountered in the validation, the following key recommendations
are offered for consideration:
(i)

(ii)

(iii)
(iv)

The CPS needs to demonstrate how institutional capacity will be developed at

both the strategic level within the country for critical institutions such as anticorruption units and an ombudsman, and at the project level, by strengthening
executing and implementing agencies to meet program objectives and mitigate
governance and safeguard risks. Good practices needs to be in greater
evidence, particularly regarding possible entry points (individual, institutional,
enabling environment), sound diagnostic preparation, and sufficiently long time
frames to attain significant changes.
The CPS results framework needs to reflect the sector results frameworks and
the planned program while providing a clear set of indicators and baselines to
measure effectiveness, efficiency, and, in particular, sustainability. These results
frameworks need to provide details on how these measures will be addressed.
An effort needs to be made to clearly articulate the value chain approach to
provide robust justification for engaging in programs that cut across sectors.
In view of the longer time period of the CPS 20142018, a CPS midterm review
needs to be undertaken that is focused on sector and CPS results framework
reviews, allows for the evaluation of cross-sector impacts, and is based on the
participatory approach used to develop the CPS 20112013. This review needs
to lead to adjustments in indicators and strategies to reflect changes in
circumstances.

42
III.

ASSESSMENT OF THE QUALITY OF THE FINAL REVIEW

150. The CPSFR quality is rated as less than satisfactory. Although a large amount of
information was provided in the final review, it was challenging for the validation to find the
essential points. Greater clarity was needed on the set of projects encompassed in the review
adhering more closely or departing in transparent way from scope as required in the
validation guidelines. The scope of the CPSFR extended beyond the boundaries required by
the validation guidelines, and this was done without providing a clear rationale and specification
of the relevant set of projects falling within the extended time period.
151. There was a lack of plausible links between project results achieved and the sector
outcomes in the CPS results framework. The CPSFR did not acknowledge the lack of
institutional outcome indicators in the CPS, and it was overly optimistic about the programs
sustainability. At the same time, it did not adequately explain the progress made, or not made,
toward these sector outcomes. To a large extent these problems were a function of a lack of
information in the DMFs, and availability of data.
152. The CPSFR was too intent on showing adherence to a formal view of Strategy 2020,
rather than recognizing the merits of the sector allocations and the portfolio logic that was
emerging in the Cambodia program. At a portfolio level, the CPSFR does not adequately
address problems of corruption and how well the ADB program was faring in terms of fiduciary
safeguards for its operations.

Appendix

43

Cambodia: Country Partnership Strategy 20112013 Final Review Validation

LIST OF LINKED DOCUMENTS
1.

Country Partnership Strategy Final Review: Cambodia, 20112013

http://www.adb.org/sites/default/files/1-CPS-Final-Review-Cambodia-2011-2013.pdf

2.

Country Economic Indicators

http://www.adb.org/sites/default/files/2-Country-Economic-Indicators.pdf

3.

ADB Approved Loans, Grants, and Nonsovereign Investment Facilities to Cambodia

http://www.adb.org/sites/default/files/3-ADB-Approved-Loans-Grants-and-NonsovereignInvestment-Facilities.pdf

4.

ADB Approved Technical Assistance to Cambodia

http://www.adb.org/sites/default/files/4-ADB-Approved-Technical-AssistanceOperations.pdf