📋 Tender Overview
Project Name
Energy Transition Sector Development Program, Subprogram 2
Project Number
58376-001
Country / Economy
Cambodia
Project Status
Proposed
Project Type / Modality of Assistance
Grant
Loan
Technical Assistance
Source of Funding / Amount
Loan: Energy Transition Sector Development Program, Subprogram 2
Concessional ordinary capital resources lending US$ 50.00 million
TA: Supporting Energy Transition Sector Development Program, Subprogram 2
Technical Assistance Special Fund US$ 500,000.00
Sector / Subsector
Energy / Energy sector development and institutional reform
Finance / Infrastructure finance and investment funds
Gender
Effective gender mainstreaming
Description
The following solutions are proposed under a sector development modality: (i) a policy-based loan to deepen the policy framework and support the government in adopting sectoral reforms to accelerate the energy transition; and (ii) a financial intermediation loan (FIL) to support private sector investments in energy efficiency. The FIL component will address a key constraint to the adoption of energy efficiency in Cambodia: access to finance, under favorable conditions, for investments in energy efficiency by local small and medium enterprises (SMEs), including those owned by women. To this end, an Energy Efficiency Revolving Fund (EERF) will be set up and operationalized to provide low interest loans to SMEs with the option of a credit guarantee product. The EERF will be financed with a concessional loan of ADB, with these resources subsequently on-lent to participating financial institutions (PFIs). The SME Bank, a state-owned bank under Cambodia's Ministry of Economy and Finance (MEF), is proposed as the financial intermediary that will administer the EERF. This critical connection between much-needed financing to local SMEs for energy efficiency investments is pivotal to deepening energy efficiency in the country. The effectiveness of a financing mechanism like the proposed EERF is also predicated on the establishment of an enabling policy and regulatory framework on energy efficiency, which was developed under subprogram 1 and subprogram 2, and will continue under subprogram 3.
Project Rationale and Linkage to Country/Regional Strategy
Robust economic growth, urbanization, and an expanding population have been driving a continuous growth in energy demand in Cambodia, especially for electricity. In 20092023, electricity demand increased more than 8-fold, from 2,077 GWh to 16,751 GWh. This trend is expected to continue, with demand projected to reach 33,241 GWh in 2030 and 60,271 GWh in 2040. In response to this exponential growth, Cambodia has resorted to imports and an expansion of its own power generation capacity. In 2023, Cambodia imported around 22% of its power needs, whereas new sources of domestic generation have included hydropower, coal, and solar. Importing primary sources of power is a risk to energy security and compromises Cambodia'
