Officials signed a deal Thursday authorizing Chinese state-owned Sinohydro Corporation to begin constructing a $280 million hydropower plant on Kampot province’s Kamchhay river.
The contract, signed at a ceremony in Phnom Penh by Minister of Industry, Mine and Energy Suy Sem and Sinohydro board director Liu Quitao, sets forth plans to begin building the 193-megawatt plant about 15 km outside of Kampot town four years from now, said Minister of Energy Suy Sem. Construction is expected to be finished in 2010, he added.
The plant is expected to produce 498 million kilowatt-hours per year, and Sinohydro has contracted to sell electricity to state-run Electricite du Cambodge at an average rate of $0.08 per kilowatt hour for four decades, the minister added.
A press release issued by the ministry claimed that the dam will only have a little negative impact on the environment, and its benefits will outweigh its disadvantages.
At the signing ceremony, Deputy Prime Minister Sok An said Cambodians have dreamed of harnessing the power of water since the 1970s.
“Hydropower will reduce the price of electricity and attract other businesses as well. The high cost of international fuel is seriously affecting businesses and investment,” Sok An said. He encouraged other investors to step forward, saying the country has the capacity for many more hydropower plants.
“Cambodia will increase step by step the amount of power it can supply the market,” he said, adding that the country also has the potential to develop natural gas production 2009.
“If that happens, it will reduce risk and provide a secure source of power,” he said.
Liu Quitao said the Sinohydro Corporation also plans to invest in the country’s airports, bridges and sewer systems.