Logo of Phnom Penh Post newspaper Phnom Penh Post - Government approves law to guarantee energy purchase

Government approves law to guarantee energy purchase

Government approves law to guarantee energy purchase

The National Assembly approved a draft law yesterday that will guarantee the state’s purchase of electricity from two large-scale private energy projects, protecting the investments against any loss resulting from political instability.

The proposed legislation mandates a power purchase agreement for electricity distributed by a 220-kilometre transmission line that Alex Corporation is building to connect the Stung Tatai hydropower dam in Koh Kong province to Phnom Penh, and energy produced by a 150-megawatt coal-fired plant that Cambodian Energy II Co Ltd (CEL2) is developing in Preah Sihanouk province.

According to a National Assembly announcement, the law would guarantee that the government would purchase all power transmitted or generated by each project regardless of whether or not the state-owned Electricite du Cambodge (EdC) has the financial capacity to do so. The legislation authorises the Ministry of Economy and Finance and the Ministry of Mines and Energy to purchase any excess energy from the two projects.

“The government will provide two types of guarantees that include a purchase agreement of electricity in case EdC cannot pay, and to guarantee the purchase of the infrastructure investment from the projects in the case that the companies cease operations due to political instability,” the announcement said.

The announcement also gives Alex Corporation room to double its project design, increasing its planned 230-kilovolt line to 500 kilovolts under the existing contract.

In February, the Council of Ministers gave Alex Corporation a green light to develop its $136 million transmission line project. The project is expected to be completed within three years. The $260 million CEL2 coal-fired plant, announced at the same time, is scheduled to be completed by late 2019.

MOST VIEWED

  • NY sisters inspired by Khmer heritage

    Growing up in Brooklyn, New York, Cambodian-American sisters Edo and Eyen Chorm have always felt a deep affinity for their Cambodian heritage and roots. When the pair launched their own EdoEyen namesake jewellery brand in June, 2020, they leaned heavily into designs inspired by ancient Khmer

  • Cambodia records first Omicron community case

    The Ministry of Health on January 9 reported 30 new Covid-19 cases, 29 of which were imported and all were confirmed to be the Omicron variant. The ministry also reported 11 recoveries and no new deaths. Earlier on January 9, the ministry also announced that it had detected the Kingdom's

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • PM eyes Myanmar peace troika

    Prime Minister Hun Sen has suggested that ASEAN member states establish a tripartite committee or diplomatic troika consisting of representatives from Cambodia, Brunei and Indonesia that would be tasked with mediating a ceasefire in Myanmar. The premier also requested that Nippon Foundation chairman Yohei Sasakawa

  • Kampot tourism quay ‘90% done’

    Construction on Kampot International Tourism Port – a 4ha quay in Teuk Chhou district about 6km west of Kampot town – has fallen off track, reaching 90 per cent completion, according to a senior Ministry of Tourism official last week. The project is now planned to be finished

  • Demining rat ‘hero’ Magawa dead at 8

    A landmine-hunting rat that was awarded a gold medal for heroism for clearing ordnance from the Cambodian countryside has died, his charity said on January 11. Magawa, a giant African pouched rat originally from Tanzania, helped clear mines from about 225,000sqm of land – the equivalent of 42