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German companies poised to storm Kingdom’s solar frontier

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The Delegate of German Industry and Commerce in Myanmar Martin Klosebelieves that now is the right time for German companies to invest in Cambodia’solar sector. Heng Chivoan

German companies poised to storm Kingdom’s solar frontier

Last year, Cambodia consumed 2,650MW of electricity, a 15 per cent increase compared to 2017. Of the amount, 442MW was imported from Thailand, Vietnam, and Laos. The rest was produced in Cambodia from coal-fired plants, hydropower dams and solar farms. Meanwhile, the government in August said 15 per cent of the energy produced in the Kingdom will come from solar panels by next year.

Looking to tap into the market, the Delegate of German Industry and Commerce in Myanmar Martin Klose is organising the Conference on Industrial & Commercial Solar in Cambodia, which will be held on Tuesday. The event will bring together more than 100 companies from Germany and Cambodia that are seeking opportunities for investment.

Klose sat down with The Phnom Penh Post’s May Kunmakara to discuss the conference and the Kingdom’s energy sector.

What does this conference mean for Cambodia?

The conference is on industrial applications of solar power and commercial solutions. We are bringing a programme made in Germany called “Mittelstand Global: Energy Solutions”, which is financed by the Federal Ministry for Economic Affairs and Energy, as well as German firms that are active in the sector.

The Kingdom’s firms will benefit from an exchange of views and gain an understanding of energy. We are inviting a lot of Cambodian enterprises that are active in the sector to Tuesday’s conference so they can learn from Germany’s experience when it comes to using alternative renewable energy as a main source of power.

Cambodian companies can learn from Germany’s experiences and implement them, be exposed to new opinions and discover business opportunities with German companies.

There are four German companies – leading players in their areas of expertise – that will attend the conference. They are small and medium-sized enterprises with very highly advanced experiences and they understand the systems, products and services that they provide.

What is your take on energy development in Cambodia?

The current situation has made the sector attractive to foreign companies. Specifically, German companies have become much more interested in initiatives to modernise the framework here. I am hopeful that this will help bring more foreign – and specifically more German – investments and expertise into Cambodia.

Energy costs in Cambodia are higher compared to other countries in the region. What can be done to entice investment into the sector?

Of course, energy costs are very high compared to Laos, Thailand and Myanmar.

I believe that bringing foreign players into the field requires transparency and a good regulation framework, which makes it possible to finance their investments. There must be an attractive rate at which energy can be sold. If that is the case, I believe that foreign companies will be more eager to participate in the development of the energy sector here.

The government aims to have 15 per cent of the Kingdom’s energy come from solar by next year. Do you think Cambodia is well-placed for solar sector investment? Why?

Yes, absolutely, Cambodia is well-placed for solar sector investment. Here, you can implement solar energy in an industrial setting by installing rooftop solar panels, for example. The sun shines all the time here – it should be possible to harness more solar energy.

Nowadays, the investment cost to set up solar systems is not that high anymore compared to other energy systems. For instance, the cost of operating in more remote areas fuelled by diesel generators over a couple of years is much higher than the investment necessary to install a solar system.

It makes sense to look into that and it is certainly better for the environment. It will become financially feasible if you look through our eyes for a couple of years.

You need to look no further than Thailand in this region. The country is using more and more solar energy. Large factories there use solar systems in their production.

As Cambodia faces power shortages, will you call on German investors to invest in the sector? Are there any German companies investing now?

Absolutely, we are encouraging German investors to invest in Cambodia’s solar sector. We are convinced that there are suitable opportunities. That is actually why the German economy ministry has funded our programme.

We have decided to bring German companies to the Kingdom to look at the market and consider the many potential opportunities they may find at the conference on Tuesday.

I believe that there are some German companies actively looking into the local market and one of them is already active in the Kingdom.

Cambodia has shown constant growth over the past few years so there are more and more industrial operations in the Kingdom. As Cambodians use more energy, we believe that it is the right time for German companies to invest.

What is your recommendation for energy development in Cambodia so it can become a regional powerhouse, especially with many hydropower dams and coal power plants set to come online in the coming years?

Well, I think what is important here is to look at the right mix of energy sources – such as trying to expand renewable energy as much as possible, as it can also preserve the beautiful countryside here and maintain good air quality.

I would recommend operating on clean energy as much as possible. It is not possible from now to tomorrow to cover everything with renewable energy – I am aware of that. But, if you make every effort, you will arrive someday to the point where you can say ‘we now use only clean energy’.

This interview has been edited for length and clarity.

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