Stock-listed Phnom Penh Water Supply Authority (PWSA) on February 1 broke ground on the $380 million Bakheng Water Treatment Plant on the northeastern outskirts of the capital in response to rising demand. This creates new investment potential growth for the company.

Prime Minister Hun Sen noted that construction of the plant would be carried out in two phases, with the first completed by the end of 2022.

He said this while presiding over a ceremony in Chroy Changvar district’s northernmost Bak Kheng commune commemorating the groundbreaking, as well as the official inauguration of the Chamcar Mon Water Production Facility.

The prime minister said construction of the first phase would be completed by the end of 2022, with water production following soon after at 195,000 cubic metres per day.

Located some 10km north of the Chroy Changvar bridges, he said the first phase is expected to cost $247 million – $155.5 million for the central infrastructure and $91.5 million for the transmission and distribution networks and other miscellaneous costs.

The initial stage is co-financed by an $85 million loan from Agence Francaise de Developpement (AFD), a $100 million loan from the European Investment Bank (EIB) and a $15 million grant from the EU, according to Hun Sen. PWSA will foot the remaining $47 million.

He said the second phase would add another 195,000 cubic metres to the facility’s daily capacity and is scheduled for completion by the end of 2023.

The phase is expected to cost $134.4 million and will be financed by a $101.4 million loan from AFD and a $33 million contribution from PWSA, he added.

“The total investment in the two-phase water supply project adds up to $381.4 million, with production capacity set to reach 390,000 cubic metres per day by the end of 2023. This’ll be quite the addition to today’s supply capacity. Today we break ground on the construction of a water treatment plant to fill that shortage,” Hun Sen said.

Cambodia Securities Exchange (CSX) vice-president Ha Jong-weon said the new investment will give PWSA new potential for growth, noting that the current price of its shares is rather undervalued.

“What is special is that most of the investment projects are funded at very low interest rates. This will help this state-owned enterprise with new growth in its business. I am sure that its stock price will increase soon, reflecting the new investments soon,” he said.

Providing a dividend yield of four per cent or more per year, Ha asserted that PWSA is a growth stock for long-term investment and that its shares trade relatively well.