PHNOM PENH, June 22 (Xinhua) -- Cambodia signed a 162.7-million-U.S.-dollar loan agreement with Japan on Monday to fund the third phase of the Southwest Phnom Penh Irrigation and Drainage Rehabilitation and Improvement project, according to the Cambodian foreign ministry.

People sit on their chairs as they relax along the Tonle Sap River in Phnom Penh on May 28, 2026. (File photo: AFP)

"The project aims to enhance agricultural productivity in rural areas and mitigate flood damage by rehabilitating and improving the existing irrigation and drainage facilities in the Southwestern corridor of Phnom Penh," the ministry said in a statement.

It added that this continued financial assistance reflected Japan's steadfast commitment to promoting Cambodia's socio-economic development and the Cambodia-Japan Comprehensive Strategic Partnership.