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Economic Agreement Signed Between Cambodian Gov't, Chinese Company
The On-lending Agreement on the Cambodia Medium Density Fiberboard Plant Project was signed Monday in Phnom Penh between the Royal Government of Cambodia, represented by the Ministry of Economy and Finance, and the Kampuchea-Chinese International Cooperation Co. Ltd.
According to the Loan Agreement, the Export-Import Bank of China has agreed to lend Cambodia a Renminbi loan in an amount of 99.6 million Chinese Renminbi Yuan (RMB 99,600,000) for the purpose of financing the eligible expenditures necessary for carrying out the Cambodia Medium Density Fiberboard Plant Project.
The joint venture agreement signed on November 10, 1996, between China State Farms Agribusiness (Group Corporation and Men Sarun Import-Export Corporation Limited of Cambodia, which decided to jointly set up a factory to produce medium density fiberboard.
The On-lending Loan shall have a maturity of 12 years, including 4 years of grace period and 8 years of repaying period.
The Kampuchea-Chinese joint venture company shall pay interest to the Ministry of Economy and Finance of Cambodia semi-annually at the rate of five percent per annum on the principal amount of the On-lending Loan and outstanding.
The Cambodia Medium Density Fiberboard Plant, located in Kompong Cham Province, eastern Cambodia and scheduled to start operation within a year, can produce 50,000 cubic meters of medium density fiberboard per year in preliminary period, mainly for exporting abroad.
The project is welcomed by senior government officials, including Prime Minister Hun Sen and Minister of Finance Keat Chhon, because it can create employment opportunities for Cambodia as well as protection of environment due to its usage of leftover bits and pieces of rubber wood.
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