Grid Expansion for Energy Transition Project (ADB-58169-001)

Countries
  • Cambodia
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Asian Development Bank (ADB)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Borrower
Government of Cambodia - Electricite Du Cambodge
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Energy
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 50.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ ADB website

Updated in EWS Aug 16, 2024

Disclosed by Bank Jul 17, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, the proposed project will: (i) construct the transmission lines for a total of 92 kilometers (km) from GS Pursat to New KCN Town; (ii) upgrade the two substations at GS Pursat and New Krokor; and (iii) support Electricite du Cambodge in project implementation, including capacity building and training.

Strong economic growth in Cambodia in the past decade has resulted in more than four-fold power demand growth, from 4 terawatt-hours (TWh) in 2013 to 16 TWh in 2023. Cambodia's medium demand growth case is projected to reach 36 TWh by 2030, 50 TWh by 2035, and 66 TWh by 2040. In response to rapidly growing power demand, ADB has been assisting the Government of Cambodia to (i) develop the country's first long-term power development master plan; (ii) scale-up renewable energy deployment particularly solar; (iii) finance the country's first national solar park in Kampong Chhnang; and (iv) upgrade and expand the power transmission infrastructure.

While power demand grows, electricity tariff in Cambodia is one of the highest among neighboring countries. This is due to the high cost of fossil-based generation power systems with inefficiency in the generation and transmission infrastructure. In Phnom Penh, households paid electricity tariffs from $0.09 to $0.18 per kilowatt-hour (kWh), and industrial consumers pay around $0.15/kWh in 2023.

Cambodia's existing transmission infrastructure is reaching its capacity while the power demand grows fast. Phnom Penh and Kampong Chhnang provinces are overloaded, resulting in transmission constraints and disproportional transmission losses (2.3%). Pursat province is also expected to face similar challenges due to quickly growing power demand and supply which includes an existing 60 megawatts (MW) solar parks in the area.

To address the challenges mentioned above, Cambodia has a comprehensive development plan of national grid and expanding transmission grid capacity is essential to evacuate an increasing power production from various resources. Among others, installed solar photovoltaic (PV) capacity in Cambodia has increased from 5 MW in 2012 to 437 MW in 2023, which accounts for 11.0% of the domestic installed capacity mix. Establishing a solar park presents an ideal solution for Cambodia to fulfill its daytime peak demand at 10:00 and 15:00, aligning seamlessly with the peak hours of solar power generation. The government aims to scale up renewable energy in generation capacity mix to total 6,326 MW by 2040, which accounts for 59% in total generation under the reference scenario of the Power Development Master Plan, 20222040. The project area of Pursat province and Kampong Chhnang province has most abundant solar resources, which has strong potential of solar parks.

Strengthening transmission grid infrastructure is urgently required. Moreover, capacity enhancement of Electricite du Cambodge (EDC) as a grid operator is becoming essential in response to growing demands and increasing variable renewable energy to maintain grid stability for reliable and sustainable power supply.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

Environment: B
Involuntary Resettlement: B
Indigenous Peoples: C

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Loan (Concessional ordinary capital resources lending): US$ 50.00 million


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contacts available at the time of disclosure.

ACCESS TO INFORMATION

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ADB has a two-stage appeals process for requesters who believe that ADB has denied their request for information in violation of its Access to Information Policy. You can learn more about filing an appeal at: https://www.adb.org/site/disclosure/appeals

ACCOUNTABILITY MECHANISM OF ADB

The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main.

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