Work on Cambodia's New 100-Megawatt Coal-Based Power Plant Begins

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leader (Cambodia) Limited (Phnom Penh, Cambodia), the wholly owned subsidiary of investment holding company Leader Universal Holdings Berhad (KUL:LEADER) (Penang, Malaysia), recently broke ground on its 100-megawatt (MW), coal-fired power project at Sihanouk Ville in south Cambodia. The power plant is expected to be operational from 2012.

The project is being developed by Cambodia Energy Limited (CEL) (Phnom, Penh), an 80:20 joint venture company formed by Leader Cambodia and Cambodia International Investment Development Group Company Limited (CIIDG) (Phnom Penh). CIIDG is a commercial body comprising several Cambodian individuals.

The venture was announced in June 2009. Under the terms of the agreement, CEL will build, own and operate the power plant. Power will be sold to state-owned Electricite Du Cambodge (EDC) (Phnom Penh) at concessional rates for 30 years. The project has been awarded a $140 million syndicated loan by a group of lenders led by OCBC Bank (Malaysia) Berhad (Kuala Lumpur). According to Datuk Seri H'ng Bok San, the deputy executive chairman of leader, the power project is expected to cost $170 million.

Another target of CEL is to develop a 700-MW, coal-fired power project in Cambodia after completing the 100-MW project. Among other developments, in January this year, Leader signed an agreement with EDC, under which the company will develop a 230-kilovolt (kV) power transmission system stretching from north Phnom Penh to Kampong Cham on a build-operate-transfer (BOT) basis. The $107 million transmission line project will be maintained and managed by Leader for 25 years after which the system will be handed over to the Cambodian government.

Cambodia's demand for domestic power is 808 MW, while its installed power capacity is about 410 MW. According to Suy Sem, Cambodia's energy minister, four hydropower projects are expected to be operational by 2011 and several more by 2012. He expects new projects to reduce the nation's dependence on imported oil for generating power. That also would help the government supply power to its consumers at lower costs.

According to the Asian Development Bank (ADB) (Manila, Philippines), electricity prices in Cambodia were the highest in the region because of the nation's fragmented power grids, the use of imported diesel to generate almost 95% of its power, and the small size of most of its power plants. The high power prices are a major deterrent for potential industrial investors in the country as well. In H'ng's opinion, Cambodia's installed power capacity would reach 740 MW by 2010 and 2,315 MW by 2024, an increase of 8.5% per year.

Cambodia's National Strategic Development Plan (NSDP) (2006-10) was developed by the Ministry of Planning with the aim of reducing poverty in the country as well as to achieve other socio-economic benefits for its citizens. The NSDP was launched by the prime minister in 2006, after obtaining approval from the National Assembly, the Senate, the Royal Government of Cambodia (RGC), and the King. The plan prioritizes all the goals and strategies of the RGC. The NSDP has laid out 43 targets, and progress is monitored and reviewed annually under the NSDP Monitoring Framework. It has been estimated that about $3.5 billion will be required over the period 2006-10 for the NSDP to achieve all its targets and goals.

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