Cambodia - Accelerating Sustainable Energy Transition Program

Overview & Synopsis

Cambodia Sustainable Energy Transition Project for Cambodia has the development objectives to strengthen power grid infrastructure for renewable energy integration and improve demand-side energy efficiency. Components: Component 1, Grid Strengthening for Energy Transition, will expand high-voltage capacity and enhance system flexibility to support variable renewable energy integration and cross-border clean power flows. Sub-components: Sub-component 1.1, Grid Strengthening, will construct 230 kilovolt and 115 kilovolt transmission lines and associated substations between GS Lvea Am and GS Arey Ksat, build the Arey Ksat Substation and the Chroy Chang Va III Substation, and extend the Wat Phnom Substation and Substation GS9 to relieve congestion, improve supply reliability in the Phnom Penh area, and enable delivery of solar and hydropower including imports from neighboring systems. Sub-component 1.2, Battery Energy Storage System (BESS) Investment, will deploy approximately 100 megawatt/200 megawatt-hour BESS at a selected substation to provide frequency control and load shifting, thereby increasing grid stability and renewable energy uptake. Sub-component 1.3, Distribution Network Expansion and Strengthening, will upgrade medium voltage (MV) urban and rural networks, including lines, poles, transformers, and accessories, and pilot Advanced Metering Infrastructure (AMI) by replacing three-phase meters and a portion of single-phase meters in Phnom Penh, Kandal, and selected provinces to improve billing accuracy, loss reduction, demand response readiness, and outage management. Component 2, Energy Efficiency Implementation, will establish a dedicated credit line to catalyze industrial energy efficiency by providing longer-tenor financing through the Small and Medium Enterprise Bank of Cambodia and the Foreign Trade Bank of Cambodia using a dual channel structure of direct sub-loans and wholesale on-lending, with required Environmental and Social Management Systems, minimum borrower equity contributions, and co-financing, supported by technical assistance, standardized appraisal, measurement and verification, and a Management Information System to track pipeline and savings. Component 3, Project Implementation Support, comprises Sub-component 3.1 to strengthen Electricite du Cambodge for procurement, contract management, environmental and social risk management, supervision, and preparation of future grid investments, and Sub-component 3.2 to build Ministry of Mines and Energy capacity and support participating financial institutions with training on energy audits, safeguards, pipeline development, monitoring, and MIS operation. Component 4, Contingent Emergency Response, will provide a mechanism to rapidly reallocate project resources in the event of an eligible crisis or emergency, guided by a Contingent Emergency Response Component manual and an Emergency Action Plan.