Twenty years ago, only 16.6 percent of the Cambodian population had access to electricity. As of 2019, that access had increased to 93 percent, with a large portion thanks to off-grid energy including solar home systems, solar lanterns, and rechargeable batteries.

Last year, 81 percent of all households were connected to the electricity grid, and more than 97 percent of all villages were covered or in the vicinity of grid infrastructure. As a result, the World Bank has recognised Cambodia as having one of the highest rates of electrification in the world.

This impressive growth in electrification has been achieved, in part, due to significant reductions in electricity tariffs and the roll-out of a national uniform tariff and the improvement of the quality and availability of power.

Now, Cambodia’s electrification challenge is providing power to the remaining 3 percent of remote, inland, island, and mountain villages where grid extensions aren’t viable or difficult to install.

To address this challenge, the Australian government funded 3i (Investing in Infrastructure) has launched a new AUD 2 million off-grid electricity project in partnership with Ministry of Mine and Energy, Electricity Authority of Cambodia and Electricite Du Cambodge, with funding from Australia’s AUD 232 million regional program, Mekong-Australia Partnership (MAP). This initiative represents Australia’s enhanced support to partner countries under the MAP on economic and environmental resilience improvement.

The project will support the Royal Government of Cambodia in delivering high-quality, safe, and affordable electricity to all Cambodians through stimulating private investment in clean and renewable energy for remote locations without electricity grids. The project will also contribute significantly to Cambodia’s climate change commitments to reduce current levels of CO2 emissions by 42 percent before 2030.

H.E. Ty Norin, Secretary of State at the Ministry of Mines and Energy, noted during the launch of the project that “bringing reliable and affordable electricity to all people in Cambodia is a priority for MME.”

“This requires special attention from the Cambodian Government to bridge the gap and find innovative ways to accelerate access in off-grid areas. I appreciate the support from the Australian Government to electrify these areas with renewable energy mini-grids,” Norin added.

Former Deputy Ambassador of the Australian Embassy in Phnom Penh, Luke Arnold, also noted the important part that reliable electricity plays in economic growth, “Connecting communities to affordable, reliable, and sustainable energy will transform lives, allowing people to start small businesses, access quality education and reach their full potential.”

He explained that the project’s public-private model will stimulate significant additional investment from the private sector and drive technology as well as business model innovation. The project’s ultimate goal is to provide a blueprint for further off-grid electrification in Cambodia and other countries in the Mekong sub-region using renewable energy technologies.

3i’s off-grid electrification project aims to electrify a minimum of 2,000 households, potentially up to 4,000, with renewable energy mini-grids. The project is being structured as a challenge fund to drive value-for-money and stimulate both technology and business model innovation by using current available technology and solutions for this project

“The competitive process is expected to attract private sector capital to fund a significant portion of the investment in generation and distribution infrastructure and achieve commercial viability and sustainability,” adds Kvammen.

Australia Government’s Support for Electrification

Built on a public-private partnership model with the goal of providing more than one million rural Cambodians with access to reliable electricity and clean, piped treated water, 3i has co-invested with 13 rural electricity enterprises, or operators, since launching. The program aims to extend electrical grids in rural Cambodia, speed up the electricity expansion network, transmission, and distribution to those locations without electrical grids and pioneer off-grid electrification solution for remote villages.

To date, 3i has stimulated investments that have connected more than 31,000 Cambodian households to the electricity grid with total combined investment of about AUD 11.8 million from both the program and electricity operators. The program has leveraged over AUD 9.02 million in infrastructure investment from the private sector.

The program also co-invested in a licensed electricity operator in Kampong Thom province’s Tum Ring district to build and operate a hybrid solar PV and battery storage system connected to an existing diesel generator and biomass operated power plant. The addition of the Renewable Energy power plant enabled the operator to expand coverage from less than 500 families to more than 1,000.

“People in my community are happier with the access to more reliable electricity with slight decrease of price,” says Ty Seang, Tum Ring Rural Electricity Enterprise owner. “The electricity generation has become greener.”

“With a solar hybrid system in place, more households have been supplied with stable electricity,” adds Morten Kvammen, Finance Adviser to 3i. “More importantly, there is a significant reduction of diesel and firewood usage, cutting down on the emission of pollutants to the environment and less deforestation.”

With more reliable electricity come more developments in both social and economic spheres. SME businesses can expand and save money on the costs of electricity, and new businesses and jobs across basic retail and market operations, services, construction, and agricultural sectors are further enabled through access to electricity.

Australia is also supporting Cambodia to develop a Variable Renewable Energy Assessment and Integration Strategy (RAIS) to strengthen links between Australian and Cambodian energy institutions. Through renewable energy potential assessments commissioned by 3i, it was found that Cambodia has significant abundant renewable energy potential, specifically for solar and wind energy, and could generate renewable energy up to 44GW, and 6GW respectively, which is more than enough to electrify all villages in Cambodia.

Sornnimul Khut is the Communications Manager for 3i. 3i is implemented by Palladium and funded by Australian Government through Department of Foreign Affairs and Trade (DFAT). The challenge fund application is open, and more information is available on 3i’s website.