State-run energy supplier Electricité du Cambodge (EDC) signed a 20-year agreement to purchase renewable energy from Singaporean solar firm Sunseap International yesterday.

The deal makes Sunseap the first solar energy source that EDC will connect to the national grid, according to EDC director-general Keo Rattanak.

Rattanak told reporters that the deal will not solve the longstanding electricity deficit in Cambodia – where much of the country remains unconnected, blackouts are common and energy prices are stubbornly high – but will help to diversify Cambodia’s energy sources.

The project will cost an estimated $12.5 million and is expected to be operational within 12 months.

Frank Phuan, director of Sunseap, said yesterday he hoped “energy from the solar farm will help to solve the issue of power shortages in the country”.

Stephen Higgins, managing partner of investment firm Mekong Strategic Partners, was bullish on solar power, predicting “Cambodia could achieve energy self-sufficiency in a fairly short period of time if it focused more on solar”.

Meanwhile, the Ministry of Foreign Affairs announced that it will be signing a deal with Japan granting Cambodia 900 million yen, about $8.7 million, to fund the expansion of electrical lines in the so-called “Southern Economic Corridor”, which links Saigon, Phnom Penh and Bangkok.

Japan International Cooperation Agency representative Yuko Tokura said she believed the deal will “contribute to the enhancement of the stability of power supply”.