ADB Approves nearly USD 128 million Loan for Power Expansion Transmission Network in Cambodia​

Asia Development Bank (ADB) has approved USD 127.8 million loans to Cambodia in the support of the construction of transmission lines and substations in order to facilitate the stable and reliable electric supply in Phnom Penh city and other three provinces in Cambodia, according to Freshnews Asia

According to ADB’s press release, the project will start the first-utility scale battery energy storage system in Cambodia which approximately costs USD 6.7 million grant, USD 4.7 million of which is funded by the Strategic Climate Fund under the scaling up renewable energy program in low-income countries and USD 2 million funded by Clean Energy Fund under the Clean Energy Financing Partnership Facility. These funds are scrutinized and administered by the Asia Development Bank. 

Sunniya Durrani-Jamal, ADB Country Director for Cambodia, said “The grid reinforcement project and an ongoing ADB’s assistance to Cambodia in power system planning indicates adequate, reliable and environmentally sustainable power supply can be provided at a reasonable cost in full support of equitable development. The battery energy storage system illustrates a large-scale of technological advancement and innovation, and the future operation of the power grid in Cambodia as well as to generate more renewable energy.

Royal Government targets the energy sectoral development as the national priority due to the fact that a more robust power supply would enhance economic productivity and social well-being. While Cambodia has made rapid development in low-cost energy production in the last 15 years, the existing transmission infrastructure is reaching its depreciation lines or useful life which is in necessarily need of expansion and reinforcement in the avoidance of supply interruption. 

The project will assist Electricite du Cambodge (EDC), a national electrical utility of Cambodia, to strengthen the transmission infrastructure through financial assistance to construct four 155-230 kilowatt transmission lines and ten substations in Phnom Penh city, Kompong Chhnang, Kompong Cham, and Takeo provinces. 

The pilot battery energy storage located near a 100-megawatt national solar park supported by ADB including the technical training. The government plans to boost solar photovoltaic generation capacity to 415 MW by 2022, up from 155 MW in 2019. The battery energy storage system is capable of storing 16 megawatt-hours of electricity and providing the support to generate renewable energy, transmission congestion relief, and balancing supply and demand. 

Mrs. Daniela Schmidt, ADB Energy Specialist, stated “the project with the financial support and the construction of transmission infrastructures for sustainable power supply will magnify Cambodia’s economic productivity, capacity, competitiveness, and diversification as well as create job opportunities and support the economic recovery in the post-COVID-19 period. The project could create 1,300 job vacancies in the construction sector with a spillover effect that will boost household income. In addition, the project also supports an endless effort of Electricite du Cambodge (EDC) in promoting inclusion and gender equality in the working environment and encourages women’s participation in the energy sector.”

The spread of COVID-19 pandemic contributes a large threat to economic growth in Cambodia, which averaged 7.1 percent annual growth rate from 2010 to 2019. Cambodia’s economy is forecasted to shrink by minus 5.5 percent in 2020, potentially pushing roughly 1.3 million people’s living conditions under the poverty line. Currently, the government is implementing the social assistance program in order to mitigate and minimize the adverse impacts on social and economic aspects. 

Since 1994, the Asia Development Bank has approved loans and grants for approximately USD 200 million to support the energy sector in Cambodia and provided roughly USD 6 million in technical assistance. The ADB funding focused on the expansion of transmission and distribution networks as well as support in the reform of the energy sector and institutional capacity building. Last year, ADB has funded USD 7.64 million in the construction of a national solar park through public and private partnership, along with the roadmap for solar energy development. 

By: Kimlong HAK