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Energy donors cool on Cambodia

Energy donors cool on Cambodia

A MEETING between donors in the energy sector and the government was organized by the Ministry of Industry and Energy with the help of the ADB (Asian Development Bank) on Oct 11-12.

The idea of the second donor coordination meeting, following one in January 1993, was to start a dialogue between donors, both governmental and corporate and the Kingdom of Cambodia. Minister of Industry and Energy Pou Southirak, appealed: "To contributing countries and private investors to give technical and financial assistance to the government in the energy sector."

But despite much talking about the current energy situation in Cambodia, little of genuine substance emerged, though this was expected.

As one of the guests working for a Western government put it: "No decision was taken during this seminar. Still, it was a good occasion to distribute business cards in case the situation gets better." He admitted that the present state of energy infrastructure was "deplorable", especially with regard to the assets and management of EDC (Electricite Du Cambodge).

He pointed out that hydro-electricity was one way to cope with the huge deficiency of electricity, especially in rural areas. It would enable people to reduce consumption of wood, which now stands at 6 to 8 million cubic meters per year. Ninety percent of this is used for fuel, he said.

Already the World Bank and the ADB have decided to give $40 million and $30 million respectively in loans for the rehabilitation of the electricity distribution in Phnom Penh, Siem Reap and Sihanoukville and aid to EDC. Their condition is that EDC be converted into a profitable autonomous state corporation.

Ith Praing, under secretary of state from the ministry, stressed that EDC could not hope for exclusive rights to production in the middle term and could be in competition with private investors.

Still, donors and private companies have been quite reserved about new investments, especially in the field of hydro-power. However the Mekong Secretariat, which coordinates water sharing by countries on the river, is to issue a report in November which will stress the potential for extracting hydro-power in Cambodia.

Vague proposals have been made for two big dams to be constructed within the next 15 years, at Kamchay, Kampot with a 120 MW capacity and Sambor, on the Mekong in Kratie, with a 900-3,200 MW capacity.

Security is the main concern for donors and private investors. Asked about this, Ith Praing said that if the government decides to protect a project, it may even have to provide regular troops.The biggest worries were concerning protection after the work is finished.

As Peter Gawezski, a USAID employee pointed out: "No country will want to give funds to a project which has nowadays big chances of being destroyed shortly after its completion."

While Pou Sothirak emphasized his intention to attract energy sector investments, some Western governments said that the bids in Cambodia didn't always seem to be done properly.

"We know it has been like that before, but we intend to get better," Ith Praing responded.

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