Warning that the demand for electric power will outweigh local supplies by next year, Electricite du Cambodge has given a final three-month extension to a joint venture that has yet to build a new power station.
Financing for the $77 million project, to be completed by the Cambodia Power Co—Beacon Hill Associates Inc’s local project company—remains unresolved, despite the World Bank’s agreement to fund almost 70 percent of the total cost through its International Finance Corp loans.
EdC officials said Monday the government-run utility will begin looking for another investor if the project’s financing isn’t firm by the end of November.
EdC supplies 65 megawatts of electricity to homes and businesses in Phnom Penh but that will not be enough to meet the demand next year, when EdC estimates 100 megawatts will be needed, according to Ty Norin, executive director for the EdC’s Corporate Planning and Projects.
“We are in a difficult situation,” said Ty Norin. “We have to make a plan how to survive the shortage of power supply until Beacon Hill will be in operation. We really want [Beacon Hill’s] project to come true, but we can’t just wait for another three months without any guarantees.”
Cambodia Power Manager Yel Sothy refused Monday to comment on the project.
In 1996 Beacon Hill Associates, a US-based company, signed a 25-year pact to supply power to EdC.
According to the International Finance Corp, which pledged to provide financial support to the project, the Cambodia Power Co is to build and operate a 60 megawatt power plant in Phnom Penh, replacing an existing 17.5 megawatt diesel power plant.
It will sell energy to EdC.
Ty Norin said the project was scheduled to start at the end of 1997 and begin supplying energy in the end of 1998.
Mark Constantine, manager for International Finance Corp’s corporate relations in Washington, admitted the agency has not yet made any commitment to the project.
Although its Board of Directors approved an investment in Cambodia Power Co in May 1998, subsequent negotiations among the project sponsor and other potential financial partners have yet to be concluded,” Constantine wrote in an e-mail.
The note also cited the Asian financial crisis and Cambodia’s political uncertainties as reasons for the delay.
He wrote that representatives of International Finance Corp, Beacon Hill and other potential partners will meet this month to discuss a timeline for the project.
