Using funds responsibly

Investing in Infrastructure ensures that the grants are used only for the agreed outputs and that there is no leakage or misuse of funds. Our safeguards occur at every step in the selection and award process:

  1. The Program Board, with members from both the Royal Government of Cambodia and Australia’s Department of Foreign Affairs and Trade, approves the type of support.
  2. The relevant ministries approve the selection criteria
  3. Investing in Infrastructure takes the offer to the market by calling for expressions of interest.
  4. The Oversight Committee, a panel of independent experts, reviews all the requests, checking that they are in alignment with all agreed principles and procedures and that the amount of investment subsidy is appropriate

The Australian Government’s Commonwealth Grant and Procurement Guidelines are the basis for awarding all our grants.

Performance or output-based payments are another important risk management strategy. Payments are triggered by agreed physical outputs, like a finished water tower or a certain length of electricity network. Output-based contracts mean that companies who don’t deliver the agreed outputs don’t get paid.

Our selection process

Investing in Infrastructure uses a competitive bidding process. Several rounds of funding are held each year, each with specific offers and criteria. If there are sufficient funds available, investment grants may be offered to all companies that comply. If demand exceeds available funds, companies offering the best value for money will be selected.

There are also mechanisms to support companies that have a unique position in the market, like an association, or companies wanting to trial a new product or service in the market. Detailed procedures and modalities are described in the Annual Work Plan 2016

Value for Money

We aim to achieve the highest benefit for the resources spent. In the first two years of the program we used relatively simple criteria like contribution per connection. We are learning as we go, and adjust our financial calculations frequently to maximise financial efficiency. Our financial models are highly detailed, and consider all costs over the life of an investment including capital, operational, overhead and maintenance costs.

Over time we’ll develop more sophisticated tools to measure the social impacts and benefits of our investments.

Ensuring funds are used properly

Investing in Infrastructure ensures that our grants are used for the purpose intended and that there is no misuse of funds. After the Program Board approves the type of support and the relevant ministries approve the selection criteria, Investing in Infrastructure prepares a justification document for an independent committee of international experts. The committee then decides if the offer is justified and in line with all principles and procedures.

We have collected a wide range of data on electricity and water company fees and performance, which allows us to accurately estimate costs and revenues. This is how we determine the amount of support needed.

A final line of defence is the use of output-based contracts. Payment only occurs after the agreed service or structure has been completed and all terms met.