ADB Approves $7.6 Million Loan For Solar

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In a bid to promote the development of renewable energies in the Kingdom, the Asian Development Bank (ADB) on Friday approved a $7.64-million loan to support the construction of a 100-megawatt solar power park in Kampong Chhnang.

ADB says Cambodia could add 200 MW of solar energy to the grid by 2021. Supplied

Pradeep Tharakan, ADB principal climate change specialist, said the bank’s assistance will not only help diversify Cambodia’s energy mix through solar power development but will also help the country meet its greenhouse gas emissions reduction target, as laid out in the Paris Agreement.

“Having reliable, sustainable, and affordable energy sources is crucial for the economic development of a rapidly expanding country such as Cambodia,” said Mr Tharakan.

The National Solar Park Project will enable Electricite du Cambodge (EDC), the national electricity utility, to construct a 100 MW solar park and other related facilities – including access roads, fencing, and drainage systems – in Kampong Chhnang province.

The project will also see the construction of a transmission system connecting to the main grid near Phnom Penh, which will enable the supply of power to the national grid, according to ADB.

The solar power plants that will be part of the 100 MW solar park will be bid out to independent power producers in two phases, with the first phase aimed at a capacity of 60 MW.

ADB’s Office of Public–Private Partnership is working as a transaction advisor to assist EDC to design and conduct an open and competitive bidding process, it said.

The financing package for the National Solar Park Project also includes an $11-million loan and a $3-million grant from the Strategic Climate Fund, specifically through the Scaling Up Renewable Energy Programme.

Also included is $500,000 in technical assistance provided by Korea’s e-Asia and Knowledge Partnership Fund to support the capacity development of EDC and the Electricity Authority of Cambodia in solar photovoltaic technology and solar park planning.

ADB will administer these resources. The project was prepared with grants from the governments of Canada and Singapore.

Last week, Sokun Sum, chairman of the Solar Energy Association of Cambodia, told Khmer Times that the government should focus on attracting investment in solar energy.

He said construction times for solar farms are lower than for hydropower dams, and with demand for electricity skyrocketing, Cambodia needs to build energy infrastructure as fast as possible.

He said up to five 60-megawatt solar farms can be built within seven months, while building a single hydropower dam can take up to five years.

“It has been brought up to our attention that power consumption in Cambodia has dramatically increased, mostly driven by construction projects. Therefore, investment in solar parks should go before hydropower, which now dominates domestic power consumption in the country,” he said.

Mr Sum acknowledged that solar farms can be expensive and require large plots of land, but said returns on investment are high.

In 2017, a $12.5-million, 10 MW solar farm was completed in Svay Rieng province’s Bavet city by Singaporean firm Sunseap. This is the country’s first large-scale solar farm.

The government recently approved two 60 MW solar plants – one in Pursat province and the other in Kampong Chhnang – along with a 20 MW expansion to an existing 60 MW farm in Kampong Speu.

Once all these projects are completed, Mr Sum expects solar to account for 3 percent of all energy produced in the country.

He said Cambodia should be producing 1,000 MW of solar power by 2020 to prevent future power shortages.

Mr Sum said companies from around the world are eyeing opportunity in Cambodia’s solar sector.

In 2018, Cambodia’s total energy output equalled 2,175 MW, with hydropower accounting for 1,330 MW, or about 62 percent, and fossil fuels-based generation accounting for 780 MW, or about 36 percent.

Despite having an abundance of solar radiation, the current solar generation capacity in the country is only 10 MW. ADB’s studies show that Cambodia can add about 200 MW of solar energy to the grid by 2021 using available technology and without disrupting the grid.

This article was originally published in the Khmer Times.