China has offered to loan Cambodia US$50 million per year to develop the Kingdom’s energy sector, as GE seeks to open a representative office in the country, officials said yesterday.

Minister of Industry, Mines and Energy Suy Sem told reporters of the loan requirements after a bipartisan meeting with Wu Yin, vice president of the Chinese energy administration.

In 2011 and 2012, Electricité du Cambodge (EDC) budgeted only $80 million to develop its infrastructure, while the loan from China would be used for development of rural electricity, he said.

“Wu Yin said our project is good. Our plan requires $50 million per year. If we receive it every year then all will be well,” Suy said, adding: “Our objective is to build power plants to meet our country’s energy demand.”

A number of Cambodian provinces have completed their power grids, connecting all of their districts, except some southeast provinces. “The plants will generate enough energy to send the supply from the provinces to Phnom Penh and others,” he said. “But rural areas are poor so we need substations to convert the energy from high tension lines to those used on a local level.

“At the moment we lack the budget to develop every district and commune as well as meet our own needs, so we require a loan from China,” Suy continued.  

Sat Samy, secretary of state for the Ministry of Industry, Mines and Energy, said at the Energy Business Forum during the ASEAN Energy Ministers Meeting this week that Cambodia’s power sector was severely damaged by years of war and neglect, and at present only 34 per cent of households have access to electricity distribution services.

Some isolated areas of Cambodia use diesel generators and medium and low voltage distribution systems.

“As a result, the electricity price is very high, the highest in the region,” he said.

Kenji Uenishi, president of the Asia Pacific region for GE Energy, said the company has decided to open a representative office in Cambodia because of the opportunities in the energy sector of this country.

“I feel the strong potential in Cambodia’s energy sector. There are oil and gas opportunities.”

To contact the reporter on this story: Rann Reuy at [email protected]