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Sihanoukville power plant draws Royal Group's interest

A recent photo posted by the Ministry of Mines and Energy shows the partially completed 700-megawatt coal-fired power plant near Sihanoukville. Facebook
A recent photo posted by the Ministry of Mines and Energy shows the partially completed 700-megawatt coal-fired power plant near Sihanoukville. Facebook

Sihanoukville power plant draws Royal Group's interest

The Royal Group, Cambodia’s biggest conglomerate, will be involved in funding future phases of a massive coal-fired power plant under construction in Preah Sihanouk province, a government official said yesterday, although details of the size of the investment or its timeline remain hazy.

The 700-megawatt power station is part of a $383 million joint venture project between Cambodian People’s Party Senator Lao Meng Khin’s Cambodia International Investment Development Group (CIIDG) and the Chinese-based Erdos Hongjun Electric Power Co.

Tun Lean, a spokesman for the Ministry of Mines and Energy and undersecretary of state for the Electricity Authority of Cambodia (EAC), said the Royal Group has agreed to help develop the project, but declined to reveal how much it would invest, or if it would buy into the joint venture. He said, however, that the investment would depend on demand once the plant gets closer to full capacity.

The coal-fired power station’s first and second generating units came online in November 2014 and March 2015, respectively, and the plant currently operates at 270-megawatt capacity. Lean said the third phase of development, which adds an additional 135-megawatt generating unit, was moving along at full steam.

“[The third phase] of this project will complete construction by next month and then testing operations will begin,” he said. “Royal Group will be involved in the other phases [depending] on the increase of load demand.”

Royal Group chairman Kith Meng declined to comment yesterday on the company’s financial commitments to the coal-fired plant, while numerous calls to company representatives went unanswered.

A secretary for the general manager for CIIDG, who declined to give his name, would not confirm whether Royal Group had made a firm financial commitment to the project.

However, he said that CIIDG, which has a 33-year build-own-operate agreement with the government, was selling electricity to the state energy utility Electricite du Cambodge (EdC) for no more than 780 riel ($0.19) per kilowatt hour.

“Sometimes we sell it for less depending on the demand and how productive the plant is,” he said.

Sin Samnang, administrative director for the Ministry of Mines and Energy in Sihanoukville, said that he had yet to be notified about any new investment decisions.

He said currently the coal-fired power plant was only 30 per cent operational and that production capacity could reach as high as 900 megawatts once the development is fully complete. Samnang added that the plant’s operation had already helped to reduce Cambodia’s persistently high electricity costs.

“Over the past few years, we have seen the cost of electricity decline from 1,000 riel, to an average of 700 riel because of coal-fired power plants and hydroelectric dams,” he said.

Additional reporting by Hor Kimsay

An article that appeared in the September 8 issue of the Post provides an essential update to this story: http://www.phnompenhpost.com/business/royal-group-submits-plan-coal-fired-plant

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