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A shining opportunity for private investors
PHNOM PENH--A 2019 United Nations Development Program (UNDP) report titled: “Derisking Renewable Energy Investment,” proposes private investment in Solar Photovoltaics (PV) as a climate adaptation solution for Cambodia.
At the present time, 81% of the country’s power is generated by hydro and coal sources, according to a 2018 annual report by the Electricity Authority of Cambodia and the Ministry of Mines and Energy. Adapting to climate change with solar PV could brace the economy for future climate impact and generate growth.
According to the UNDP report, solar PV is “cost-competitive” and would lead to lower costs than “a future coal and hydro baseline energy mix.” The report also projects that ,with the adaptation of solar PV, Cambodia could potentially attract “USD $903 million in private-sector investments, have USD $146 million in economic savings” as well as “reduce its C02 emissions by 8.7 million tonnes over 25 years.”
Solar PVs offer a sustainable solution to Cambodia’s growing power demand, which a 2018 Asia Development Bank report estimates will double by 2030.
According to the UNDP report, Cambodia could potentially generate an average of 5Wh/m² (watt per square meter) per day in view of the six-to-nine hours of sunshine it sees daily. However, investment levels in solar PV in the domestic and international private sectors “have remained low” in the country.
The UNDP attributes this to high financing costs due to the high risk accompanying every type of solar PV sub-sector in Cambodia—utility-scale, on-grid rooftop PV, off-grid mini-grids, and solar home systems.
The suggested public “derisking” measures the report outlined were to: “train a high-quality private sector workforce in Solar PV,” provide “early financial aid to industry associations” and encourage domestic-market solar PV competition, “reform the domestic financial sector,” and “develop renewable energy and solar PV targets to clarify investment potential.”
The UNDP report recommended that the country attract private investment in the renewable energy sector to “limit generation from unclean sources” and provide “long-term energy security for Cambodia.” Private sector investment could help facilitate the transition toward renewable energy in the country, the report noted.
Source: UNDP Report