The planned Kamchay hydroelectric dam in Kampot province may not lower electricity costs significantly in Cambodia unless the Chinese company the government contracted to build the plant can secure a low interest loan in China, officials said Thursday.
The Cambodian government has also become involved in loan negotiations between the Chinese contractor Sino Hydro and Chinese state-owned bank China Eximbank, the officials said.
Sino Hydro beat out China Guodian Corp for the project in May after three other companies, including one from Canada and one from Japan, dropped out of the bidding.
Ty Norin, head of the Electricity Authority of Cambodia, said that China Eximbank has offered Sino Hydro a $270 million loan at 6 percent interest to build the Kampot province dam. The company had sought a 2 percent interest loan.
Minister of Industry, Mines and Energy Suy Sem said he has sent a formal request to Eximbank to negotiate on lowering the interest rate for the company.
“If the interest rate is high, the company will sell electricity at a high price too,” Suy Sem said.
Ty Norin said he could not reveal the price at which the government is seeking to purchase electricity.
The Kamchay dam is expected to generate 180 megawatts of electricity, which it will sell to Electricite du Cambodge in Phnom Penh.
China Eximbank, wholly owned by the central Chinese government, is the sole lending bank for Chinese government concessional loans, according to the bank’s Web site.
Bun Narith, the deputy director of the hydroelectric department at the ministry, said in May that the Kamchay dam will cost $170 million to construct while $100 million will be spent on preliminary studies.
Kampot Governor Puth Chandarith said he has not yet seen any activity at the Kamchay site.
