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Cambodia is urbanizing fast. Nearly a quarter of its 17 million people now live in cities¡ªand that number is expected to rise to 6 million by 2050. While urbanization has brought job creation and economic development, it has also deepened inequality and increased vulnerability to climate impacts, especially floods and extreme heat.

In Phnom Penh, informal urban expansion has quadrupled the city¡¯s footprint since the 1980s, eroding wetlands and heightening both the frequency and severity of floods. The city now experiences up to 25 heatwave days annually¡ªfive times more than surrounding rural areas. Built-up areas are also a major driver of greenhouse gas (GHG) emissions, accounting for 37 percent of total emissions in 2015.

Laying the groundwork for climate-smart growth

To address these mounting challenges, the World Bank's  provided Cambodia with early-stage technical assistance between 2022 and 2023. This support helped the municipality of Phnom Penh and the national Ministry of Land Management Urban Planning and Construction to strengthen urban planning and integrate climate risks into long-term development strategies.

Working with local stakeholders, the Gap Fund developed a customized urban planning tool that modeled spatial data and different development scenarios through 2050¡ªranging from business as usual, to ambitious low-carbon development to achieve net zero emissions. This helped officials assess how different policy choices would affect land use, energy consumption, water and waste, public transport, emissions, and access to public services. The three scenarios examined Phnom Penh¡¯s potential growth: a) without major changes in urban policy, b) by implementing current national plans and goals, and c) through the adoption of bold, low-carbon, climate-resilient urban policies and investments to reach net zero.

Turning insights into action

The Gap Fund analysis highlighted how adopting key, cost-efficient urban policy actions and investment decisions could help Phnom Penh move closer to a low-carbon, sustainable future. With Gap Fund support, Phnom Penh:

• Drafted a city resilience assessment
• Developed targeted policy recommendations, emissions projections and estimated financing needs for critical infrastructure investments in mobility, energy, wastewater and solid waste management.
• Updated its Green City Strategic Plan, now pending approval
• Estimated $7.5 billion in implementation costs for climate smart urban development
• Trained 35 municipal and national officials from MLMUPC and the environment, transport and sanitation departments on city scenario planning and growth modeling
• Strengthened coordination and knowledge exchange between key ministries and Phnom Penh, and helped form an inter-agency steering committee for this purpose

As a result, the city¡¯s goals now include activities to:

• Curb urban sprawl by promoting compact urban development
• Improve people¡¯s access to amenities and public transit networks
• Build 100km of new bus routes
• Reduce GHG emissions by 40%
• Cut energy consumption by 36% in the residential sector and 46% in commuting
• Halt projected rises in land surface temperatures and
• Increase wetland areas

These efforts have not only shaped urban planning in Phnom Penh, but also informed national dialogue¡ªguiding discussions at the in May 2024 and informing the World Bank¡¯s (CCDR) for Cambodia.

Scaling to cities across Cambodia

Encouraged by Phnom Penh¡¯s progress, the Gap Fund scaled support to seven additional cities, namely Battambang, Kampot, Kep, Khemarak Phoumin (or Koh Kong), Poipet, Siem Reap and Sihanoukville. Further technical assistance was provided to enable local governments to:

• Draft tailored climate strategies
• Identify and prioritize climate-informed infrastructure investments
• Develop low-carbon investment portfolios and action plans
• Conduct pre-feasibility studies for projects and prioritize these.

The Gap Fund¡¯s early-stage technical assistance set the groundwork to build trust across government levels and helped secure further assistance for the seven additional cities.

A national vision for resilient cities in Cambodia

Gap Fund support has helped Cambodia chart a path toward greener cities¡ªlaying the foundation for over US$7.6 billion in potential climate-smart urban investments.

These early efforts are now feeding into the development of Cambodia¡¯s National Urban Policy, with the Ministry of Land Management, Urban Planning, and Construction exploring low carbon investment portfolios. This has already identified US$127.4 million in potential climate investments and trained 100 government officials on climate smart urban and spatial development.

Find out more about the City Climate Finance Gap Fund projects and technical assistance on the Gap Fund  page.

This story was prepared by Rajeshree Sisodia, Consultant, World Bank and Sandrine Boukerche, Senior Climate Change Specialist, World Bank. It was funded by the City Climate Finance Gap Fund, a Multi-Donor Trust Fund with support from the Governments of Germany and Luxembourg.