Cambodia is undergoing rapid urbanization, with nearly a quarter of its 17 million population residing in cities. This figure is expected to increase to 6 million by 2050. Urbanization has facilitated job creation and economic development but has also exacerbated inequality and heightened vulnerability to climate impacts such as floods and extreme heat.
In Phnom Penh, the city's expansion since the 1980s has led to increased flood exposure due to the loss of wetlands. The city now experiences up to 25 heatwave days annually, significantly more than rural areas. Built-up areas contribute notably to greenhouse gas emissions; in 2015, they accounted for 37% of all emissions.
To tackle these challenges, the World Bank's City Climate Finance Gap Fund provided Cambodia with US$250,000 in early-stage technical assistance from 2022 to 2023. This aid supported Phnom Penh's municipality and the national Ministry of Land Management Urban Planning and Construction in enhancing urban planning and integrating climate risks into long-term strategies.
The Gap Fund worked with local stakeholders to develop an urban planning tool that modeled spatial data and various development scenarios through 2050. These scenarios ranged from business as usual to ambitious low-carbon development aimed at achieving net zero emissions. Officials used this tool to assess how policy choices would impact land use, energy consumption, water and waste management, public transport, emissions, and access to services.
The analysis revealed that key urban policy actions could guide Phnom Penh towards a sustainable future. With support from the Gap Fund, Phnom Penh drafted a city resilience assessment, developed policy recommendations and emissions projections, updated its Green City Strategic Plan pending approval, estimated $7.5 billion for climate-smart development implementation costs, trained officials on scenario planning and growth modeling, strengthened inter-ministerial coordination, and formed an inter-agency steering committee.
Phnom Penh’s revised goals include promoting compact urban development, improving access to amenities and transit networks, building new bus routes, reducing GHG emissions by 40%, cutting energy consumption in residential sectors by 36% and commuting by 46%, halting land surface temperature rises, and increasing wetland areas.
These initiatives have influenced both local planning in Phnom Penh and national discussions at forums like the Cambodia Urban and Housing Forum in May 2024. They also informed the World Bank’s Country Climate Development Report for Cambodia.
Following Phnom Penh's progress, the Gap Fund extended support worth US$275,000 to seven additional cities: Battambang, Kampot, Kep, Khemarak Phoumin (or Koh Kong), Poipet, Siem Reap, and Sihanoukville. This assistance will help draft climate strategies tailored for each city while identifying priority infrastructure investments aligned with low-carbon objectives.
Overall technical assistance from the Gap Fund amounted to approximately US$525,000 across Cambodia. These efforts are feeding into developing Cambodia’s National Urban Policy as authorities explore low-carbon investment portfolios identifying potential investments totaling US$127.4 million while training government officials on climate-smart urban development.
For more information about these projects visit the City Climate Finance Gap Fund LinkedIn page.
This report was prepared by Rajeshree Sisodia and Sandrine Boukerche of the World Bank with funding from the City Climate Finance Gap Fund supported by Germany's Government along with Luxembourg’s Government contributions.