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Kingdom’s electricity demand retreats on Covid-induced economic shocks

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The energy ministry’s Victor Jona says peak electricity demand has fallen to just 1,700MW this year from 2,000MW last year. Hong Menea

Kingdom’s electricity demand retreats on Covid-induced economic shocks

Electricity demand in the Kingdom tumbled between 10 and 12 per cent this year due to Covid-19-induced economic shocks in key sectors – above all in garment manufacturing – a senior Ministry of Mines and Energy official told The Post on Friday.

Victor Jona, the director-general of the ministry’s General Department of Energy, said some 300 garment factories have filed for operational suspension since January citing business slowdown as Covid-19 continues to paralyse regional and global economies.

“The onset of Covid-19 blemished this year as the first time in my tenure at the ministry to see a year-on-year drop in electricity demand,” he said, adding that demand typically grows between 15-20 per cent annually.

He pointed out that electricity consumption in the garment manufacturing sector accounts for more than 40 per cent of the total.

“Electricity demand drops in consonance with a decline in economic growth.

“Many a garment factory either filed for operational suspension or shut down as orders dried up from our two largest markets – Europe and the US took severe economic blows from the coronavirus, with buyers there cancelling or freezing orders from us,” Jona said.

Peak electricity demand has fallen to just 1,700MW this year from 2,000MW last year, he said, noting that household consumption has largely remained stable.

In May, the government issued a plan to reduce electricity tariffs for companies in four key sectors – manufacturing, agriculture, commercial and service, for five months starting from June to encourage them to continue working during the spread of Covid-19.

Companies powered by the state-run Electricite du Cambodge (EdC), or private companies that purchase electricity from the EdC, are to pay only for the electricity they consume.

Electricity bills are expected to be reduced by 25 per cent based on previous averages from January to March of this year.

On October 13, the International Monetary Fund (IMF) projected a 2.8 per cent contraction in the Cambodian economy this year, and a sharp rebound next year to 6.8 per cent growth.

And according to its October 21 report, global growth has been revised to minus 4.4 per cent this year and 5.2 per cent next year.

The Asia-Pacific is also starting a tentative recovery, but at differing speeds for most countries, the IMF said.

Economic activity in the region is expected to slide by 2.2 per cent this year, due to a sharper-than-expected downturn in key emerging markets, and then grow by 6.9 per cent next year, it added.

Jona voiced his optimism that improvement in the Covid-19 situation would lead other countries to reopen their economies and winch up the Kingdom’s export figures.

“Demand will rebound as economic activities resume next year, particularly in the garment sector,” he said.

Since the emergence of the pandemic, 69 factories suspended work and 130 companies closed their doors, leaving 70,000 workers out of jobs, Ministry of Labour and Vocational Training statistics show.

Last year, Cambodia had 1,730 factories, of which 1,069 were for manufacturing garment, textile, footwear and travel goods, according to statistics from the Ministry of Industry, Science, Technology and Innovation.


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