A Public-Private Partnership Brightens Lives in Cambodia

Feature | 3 May 2010

A private power company in Cambodia is bringing cheap, affordable electricity to rural villages - boosting productivity, incomes, and comfort for poor people.

EK Phnom Village, Cambodia - Neang Sokha says she is able to live a "civilized life" now that the electricity supply has improved so much in the village of EK Phnom, in Battambang province. Her family of seven sleeps well every night under the breeze of a fan they leave on throughout the night. They can also afford to watch more TV now that it runs on electricity rather than expensive batteries.

"We use about 20 kilo a month now and pay only 20,000 riel (KR) (US$5)," she says, referring to kilowatt-hours of electricity. "Before, we used only 10 kilo because it was so expensive - even then we paid KR50,000 (US$12.50)." The family slept without a fan even in the hot, dry season because they could not afford to use electricity all night.

Like others in the village, Neang Sokha is remarkably aware of the amount of electricity the family consumes and the money they pay for it. Perhaps this is because a steady supply of electricity is still a new pleasure here and just a few years ago the cost of electricity was prohibitively high.

A steady supply of electricity imported from Thailand, transmitted to urban and rural consumers at affordable rates under a project supported by an US$8 million ADB loan to a private company, is behind the transformation. The project has also drastically reduced pollution from diesel-powered generator sets in the three provinces of Siem Reap, Banteay Meanchey, and Battambang.

Plenty of Power at the Right Price

Before the imports, a private electricity supplier was able to provide electricity only 4 hours a day, between 6 p.m. and 10 p.m. If the villagers wanted more, they were forced to buy from private operators who used small generators, or gensets as they are known all over Cambodia.

"We had to pay KR5,000 (US$1.25) for every kilo," says Neang Sokha. "Now, we get it for one-fifth that price, at only KR1,000 riel (US$.0.25)." Not only that, electricity is available all the time. In 3 months, there have been only two power cuts, she says, and that too only for an hour or so. Earlier, there were cuts even during the 4 hours a day that the electricity board provided power.

The ADB loan to Cambodia Power Transmission Lines (CPTL) covers 25% of the cost of the project that brings power along a 115 kilovolt transmission line from Thailand. It supports a public-private partnership between the state-owned Electricité du Cambodge (EDC) and CPTL, a private company incorporated in Cambodia. ADB's assistance helped catalyze investment from private entities and additional loans from the Export-Import Bank of Thailand and local banks.

The project is supplying electricity to a growing number of customers at ever decreasing rates, says Lim Bun Than, head of EDC in Battambang. The number of connections rose to 27,000 in February 2010 from 20,000 in 2008. With cheaper electricity available throughout the day, consumption jumped to 38 million kilowatt-hours from about 28 million kilowatt-hours in the same period. EDC, which only 10 years ago suffered power losses upward of 35% a year in Battambang, has now managed to cut that to less that 10% and expects to keep bringing that figure down.

Power Cuts

Lim Bun Than notes that the biggest advantage to consumers is that affordable electricity is now available at all times, for both domestic and business uses. It is especially useful to small and medium-sized businesses that until recently depended mainly on expensive generator sets.

Chhy Kimyean and her husband Soeum Chhay have run a hairdressing business in Ek Phnom since 2003. Their customers come from within their village of 3,000 households. Between them, they attend to up to 10 customers a day.

"Our business depends on electricity," says Chhy Kimyea. She uses hand-held blow dryers and the simple salon needs to be lit during business hours. The decrease in electricity prices has been a boon for the business. Now electricity is so much cheaper than the gensets of the past, Soeum Chhay uses electric cutters rather than scissors for cutting men's hair. "It is easier and faster," he says.

The family uses between 20 and 30 kilowatt-hours of electricity every day, perhaps a bit more in the hot season, says Chhy Kimyea. With lower costs, she now has more money to spend on her two sons, including paying for extra tuition for her older son, who is 15.

Down the road from Chhy Kimyea and Soeum Chhay is a small steel-cutting shop. Sin Bunkhoeun cuts steel rods used in construction. Since his work requires electricity throughout the day he bought his own genset some years ago. It was expensive. "I spent anywhere from KR4,000 to KR12,000 a day (US$1-US$3) per day on diesel." Now he spends KR50,000 (US$12.50) in a whole month, or an average of US$0.41 a day and does not bother to use his genset.

Treating Travelers to Power

Powering businesses is equally important in the neighboring province of Siem Reap, home to the magnificent temples of Angkor Wat and Angkor Thom, and other historical sites that have made this province a tourist hub. Angkor Wat graces the Cambodian flag, a symbol of the country itself. A steady supply of electricity is essential to run hotels, restaurants, and other establishments that cater to tourists.

In the city of Siem Reap, the provincial capital, Sao Yukun runs the budget Naga Guest House, frequented by visitors from France, Germany, Spain, the United States, and other countries. Just a few years ago, frequent power cuts forced him to use expensive and noisy gensets. "The gensets were so noisy that some of my guests would leave - they couldn't stand the noise," he says. Sao Yukun also had to rely on the gensets to refrigerate food for the guest house restaurant. Even in the hours when EDC supplied electricity, there were frequent power cuts. But now there are no power cuts, no need for expensive, noisy, and polluting gensets. Electricity is much cheaper and always available.

Sao Yukun has also benefited from an ADB-supported roads improvement project. "All roads in the city and into the city are better now, making it easier to get around." He believes this has encouraged more tourists. And he says that business is booming. Even the recent global recession has had no impact on budget accommodation and he is now in the process of building an extension to the guest house.

The steady supply of electricity, meanwhile, has also benefited a pharmacy that he owns. He sells vaccinations and some medicines that need to be refrigerated, so steady power is critical.

Electricity for a Brighter Future

The project is powering the transmission grid for northwest Cambodia and is set to become part of the national power grid.

"The towns and cities of northwest Cambodia are brighter because of the CPTL Power Transmission Project ," says CPTL executive director Wang Yeong Khang.