From Carbon to Competition: Cambodia’s Transition to a Clean Energy Development Pathway

This case study takes a deep dive into Cambodia’s multidimensional energy sector transition, a joint effort by the government of Cambodia and the Asian Development Bank (ADB) to reformulate how the nation approaches power generation: from thermal and large hydro to scalable, low-cost renewables; from bilaterally negotiated power purchase agreements to competitive international tendering; and from binary public or private operating and ownership structures to complex blended risk-sharing modalities.

In 2017, coal and hydro were Cambodia’s two primary sources of power, together accounting for 81 percent of installed capacity. Thermal generation, however, was vulnerable to shifting global coal prices, while hydro was proving unreliable in the face of climate volatility. In the face of an increasing and urgent supply shortfall, solar offered the brightest light: an abundantly available, vastly untapped and increasingly price-competitive resource, Cambodia’s year-round irradiation presents a mammoth potential of 30,090 GWh per year. With an aim to incentivize an entry into solar, the Climate Investment Fund’s (CIF) Scaling Up Renewable Energy Program in Low Income Countries (SREP) drafted an Investment Plan for Cambodia in June 2016, introducing concessional and grant financing facilities that could trigger pilot projects in a sector with, at the time, no installed capacity. In 2017, in consort with the Asian Development Bank (ADB), the CIF revised its Investment Plan, adding provisions for a National Solar Park Program.