Thousands of residents living in the countryside will see lower electricity rates by 2004 under Cambodia’s first major rural energy rehabilitation project, government and Asian Development Bank officials said Thursday.
The government, Electricite du Cambodge and the ADB have reached a draft agreement on the $27 million project that builds small-scale power plants and rehabilitates deteriorated distribution lines in provincial towns over the next three years. ADB plans to loan $18.6 million for the project.
“Availability of power is a basic necessity for economic growth,” said Urooj Malik, the ADB’s country representative. “It’s an essential physical infrastructure toward enhancing private investment in Cambodia.”
Officials say the project is the first of its kind in Cambodia. The provinces that will benefit are Kompong Speu, Takeo, Kampot, Prey Veng, Svay Rieng, Ratanakirri, Stung Treng and Bantey Meanchey, officials said.
ADB’s board of directors is expected to approve the low-interest loan by December, Malik said. The French Development Agency has pledged to finance an additional $3.2 million, while the government will contribute $5.1 million, government officials said.
When completed, energy prices will be lowered to about $0.17 per kilowatt-hour, down from the current $0.28 rate, said Tun Lean, energy development director for the Industry Ministry.
“It will increase the capacity of supplying energy and reduce prices,” Tun Lean said. But the new, lower rate is still higher than those in Phnom Penh.
According to the project plan, a small power plant—generating from 500 kilowatts to 2 megawatts—will be built in each provincial town. Currently private power suppliers sell energy to provincial authorities, who then distribute it. The power plants will be operated by the state-run utility.
New distribution networks will also be installed throughout the eight towns, according to the plan. It is expected to reduce energy loss during distribution to less than 20 percent, down from the current 35 to 55 percent losses, Tun Lean said.
Many of these power plants and local distribution networks will later be connected to planned national transmission grids, which allow energy from various sources—including power from Vietnam and Thailand—to be transmitted to each other, said Ty Norin, deputy director of EdC.
Donors, which have called for EdC reforms, have contributed $190 million over the last 10 years to the power sector.
