A Malaysian company this week began construction on a $92.21-million power transmission line project and will charge Cambodia’s state-run electricity company $437.5 million to use the lines for 25 years, the company said in a statement.
In the statement posted to the website of Bursa Malaysia, the country’s stock market operator, Pestech International says that its subsidiary, Diamond Power Limited, on Wednesday finalized an agreement to build the project with the Ministry of Mines and Energy and Electricite du Cambodge (EdC).
“The Project has commenced on 8 April 2015…and is to be completed by 30 November 2017,” the statement says.
The 230-kilovolt lines are expected to transfer electricity from Kratie province to Kompong Cham province once the 400-megawatt Lower Sesan 2 dam in Stung Treng province goes online in 2017, it says.
Charles Tan, a spokesman for Pestech, said in an email that the lines would be 125 km long.
According to the statement, Diamond Power will operate the lines for 25 years before ownership and control are transferred to the Cambodian government.
EdC also agreed to pay Diamond Power $12.25 million each year for three years and $18.22 million for the remaining 22 years. In total, EdC will pay Diamond Power about $437.5 million.
Keo Rattanak, director-general of EdC, could not be reached for comment.
Victor Jona, director-general of the Mines and Energy Ministry’s energy department, confirmed the agreement with Diamond Power.
“The government approved the project sometime in March this year, but it will be implemented very soon,” Mr. Jona said.
He added that a separate planned transmission line project would link the Diamond Power lines with the Lower Sesan 2 dam.
“The transmission lines between Kratie and Stung Treng provinces is another project that will cost between $40 million and $50 million and will be implemented by EdC under a loan agreement with the Indian government,” Mr. Jona said, adding that he could not remember the name of the company that would build the lines.
He said that while impact assessments were ongoing, construction on the project was expected to begin by the end of the year.
The Lower Sesan 2 dam is being built by Hydropower Lower Sesan 2, a joint venture between local conglomerate Royal Group and Chinese firm Hydrolancang International Energy Co. Ltd.
The dam is expected to displace about 5,000 people.