Greater Mekong Subregion

Greater Mekong Subregion (GMS) Transmission Project (Cambodia) (Loan 2052)

Overview

In December 2003, ADB approved a loan for $44.3 million to Cambodia from its Special Funds resources for the captioned project (loan 2052).

The objectives of the loan are: to stimulate trade and economic growth in the GMS by promoting the provision of sustainable and reliable electricity at affordable prices to consumers in Cambodia; and to promote poverty reduction in Cambodia by enhancing access to electricity through reduced high up-front connection costs.

The project will support cooperation in the power sector by interconnecting Cambodia and Viet Nam. The former will be assured of more reliable, lower cost supply of electricity supply and the latter will accelerate electrification of a remote region. In the initial years the Electricite du Cambodge could experience significant reduction in its cost structure, while in the medium term, the project will improve EDC's financial viability, reduce pressure on tariffs, and help make Cambodian industry more competitive.

The project covers the following components:

1. Infrastructure Component
2. Bulk Supply Distribution Component
3. Resettlement
4. Capacity Building

Infrastructure Component

This will consist of a high-voltage transmission system comprising a 220 kV double-circuit transmission line connecting to 115kV lines that will provide the final connection to Phnom Penh. Substations will be constructed at west Phnom Penh and at Takeo, which will provide a 22 kV supply to the surrounding areas and to villages along the transmission line route. The project transmission line will link to a new substation at Chau Doc on the Viet Namese side of the border and then, via a 90 km 220 kV transmission line to the existing substation at Thot Not, which will be financed by the World Bank and scheduled for completion by 2005.

Bulk Supply Distribution Component

The least cost option for electrification includes villages located within 1 km on both sides of the right-of-way, and to supply each village with a 22 kV system using a single-wire, earth-return system, which is suitable for low density roads and can be economically expanded with increased demand. The 22 kV system will be operated by EDC which will supply bulk power to a convenient point in each village.

Resettlement

Implementation and monitoring of the Resettlement Plan is included in power cost. About 634 households would be affected as land acquisition is required for two substations and access and for towers along the transmission lines. Compensation for lost assets would be paid in cash at replacement cost, and socio-economic rehabilitation measures would be provided to improve resettlers' livelihoods or restore them to pre-project conditions.

Capacity Building

This will include:

1. Support for a Resident Financial Management Adviser for EDC to improve its financial/ accounting functions and reporting ability;
2. Provision of Demand Management and Consumer Services which includes targeted information to help consumers with energy saving options;
3. Private Sector Participation to support EDC in mobilizing private providers in the project area;
4. Environmental Management and Social Safeguards to support education of social and environmental specialists of EDC;
5. Support for Electricity Authority of Cambodia in monitoring of licenses and review of tariff applications; and
6. Tariff Review Study of Phnom Penh Operations to finance consultants to review to long-term tariff structure and rates for Phnom Penh.

Project Cost and Financing ($ million)

Status

Ongoing.

For detailed information on the project, write to the GMS Unit (ADB) at the following e-mail address:

gms@adb.org