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ADB turns the spotlight on solar power for Cambodia

A worker installs solar panels at a site in India in May. CHANDAN KHANNA/AFP
A worker installs solar panels at a site in India in May. Chandan Khanna/AFP

ADB turns the spotlight on solar power for Cambodia

The Asian Development Bank (ADB) has announced a collaboration with Cambodia’s state electricity provider to set up a 100-megawatt national solar-park programme that when completed would represent the largest solar production capacity in the country.

The ADB signed an agreement with Electricite du Cambodge (EdC) on Tuesday under which the regional development finance institution will carry out a feasibility study for the programme and develop a public-private partnership (PPP) framework, it said in a press release. The ADB will then seek private sector partners for the construction and operation of the solar park as well as provide concessional loans for the project.

“The 100 megawatt (MW) solar power park programme will be implemented in two phases, the first phase is around 30 MW to be followed by a second phase of 70 MW,” the release said. “This project will also help in developing a template for solar PPPs in Cambodia and, potentially, in other parts of neighbouring Southeast Asia.”

An ADB representative said yesterday that the development bank and the EdC had yet to determine whether the two stages of the solar-park programme would be built on a single site, or in separate locations.

“The cost estimate of the 100 MW is not certain at this time,” the representative said. “The costs of solar projects are coming down rapidly and the expectation is Cambodia can take advantage of the lower project costs in terms of the lower delivered cost of power.”

Earlier this year, ADB partnered on a separate solar project in Cambodia, providing a $9.2 million loan to Singapore-based Sunseap Group to build a 10 MW solar farm in Bavet. The project, which also saw investment from France’s BRED Bank and is set to come online later this year, was billed as the largest planned project of its kind to date in Cambodia.

Victor Jona, board chairman of the EdC, said the new solar projects were part of Cambodia’s strategy to diversify its energy production and increase energy security by adopting more renewable energy sources.

“This can bring a lot of green energy to the system as it is very environmentally friendly,” he said. “In the future we can combine all these sources, coal, hydropower, oil and solar, to increase domestic electricity supply, although we want to use less oil because of the high costs of electricity production.”

Jona could not give a cost for the project, but said that 1 megawatt capacity might cost around $1.2 million, though the project’s size could bring unit costs down further. He said the EdC would conduct its own feasibility study before moving forward with the project.

Cyril Monteiller, general secretary of the Solar Energy Association of Cambodia, said the ADB project was made possible by the decreasing costs of solar energy, but also the willingness of the Cambodian government to pursue renewable methods of energy production.

“We are happy to see that solar energy is moving forward in Cambodia and to see that the government and the ADB are putting measures in place to create more solar production capacity in the country,” he said. “The decrease in the cost of solar makes it possible to consider using solar because it is now becoming competitive relative to other energy sources.”

Monteiller said large projects such as this one represent a major leap forward for solar energy in Cambodia, which relies heavily on fossil fuels for its domestic energy production.

“We think it is very important to have large projects such as this one to really make solar part of the energy mix in this country,” he said. “But this does not mean we should stop focusing on smaller projects, particularly rooftop solar, and today we see that this is not part of the government’s strategy.”

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