The Asian Development Bank (ADB) has approved a US$127.8 million loan to support the construction of transmission lines and substations to help provide Phnom Penh and three other Cambodian provinces with a reliable electricity supply.

The ADB said on September 11 that the project will also pilot the first utility scale battery energy storage system in Cambodia, which will be funded by a US$6.7 million grant. The amount includes US$4.7 million from the Strategic Climate Fund under the Scaling Up Renewable Energy Programme in Low-Income Countries,  and US$2 million from the Clean Energy Fund under the Clean Energy Financing Partnership Facility. Both funds are administered by the ADB.

“The Grid Reinforcement Project, along with ADB’s ongoing assistance to Cambodia in power system planning, shows that adequate, reliable, and environmentally sustainable power supply can be provided at a reasonable cost to support equitable development,” says ADB country director for Cambodia Sunniya Durrani-Jamal. “The battery energy storage system will showcase how large-scale deployment of innovative technology applications can be used to operate Cambodia’s grid in the future and generate more renewable power.”

The government has set energy sector development as a national priority, as a more robust electricity supply will boost economic productivity and quality of life. While Cambodia has made significant progress in expanding lower-cost power generation in the past 15 years, its existing transmission infrastructure is reaching capacity and needs to be expanded and reinforced to avoid supply interruptions.

The project will help the Electricite du Cambodge, Cambodia's national electricity utility, strengthen its transmission infrastructure by financing the construction of four 115–230 kilovolt transmission lines and 10 substations in Phnom Penh and Kampong Chhang, Kamong Cham, and Takeo provinces.

The government plans to increase solar photovoltaic generation capacity to 415 MW by 2022, up from 155MW in 2019. The battery energy storage system supported by the project is capable of storing 16 megawatt-hours of electricity and providing services to help with renewable energy integration, transmission congestion relief, and balancing of supply and demand.

“The project, by financing and constructing much-needed transmission infrastructure for sustainable electricity supply, will boost Cambodia’s economic productivity, competitiveness, and diversification, create jobs, and support the country’s recovery from the coronavirus disease (Covid-19) pandemic,” says ADB energy specialist Daniela Schmidt. 

Covid-19 has slowed down Cambodia’s economic growth, which averaged 7.1% annually from 2010 to 2019. The economy is projected to contract by 5.5% in 2020, potentially pushing 1.3 million more people into poverty. The government is implementing an assistance programme to mitigate the pandemic’s adverse social and economic impacts.