Cambodia: Sihanoukville power plant draws Royal Group's interest

Cambodia: Sihanoukville power plant draws Royal Group's interest

The Royal Group, Cambodia's biggest conglomerate, will be involved in
funding future phases of a massive coal-fired power plant under construction
in Preah Sihanouk province, a government official said yesterday, although
details of the size of the investment or its timeline remain hazy.

The 700-megawatt power station is part of a $383 million joint venture
project between Cambodian People's Party Senator Lao Meng Khin's Cambodia
International Investment Development Group (CIIDG) and the Chinese-based
Erdos Hongjun Electric Power Co.

Tun Lean, a spokesman for the Ministry of Mines and Energy and
undersecretary of state for the Electricity Authority of Cambodia (EAC),
said the Royal Group has agreed to help develop the project, but declined to
reveal how much it would invest, or if it would buy into the joint venture.
He said, however, that the investment would depend on demand once the plant
gets closer to full capacity.

The coal-fired power station's first and second generating units came online
in November 2014 and March 2015, respectively, and the plant currently
operates at 270-megawatt capacity. Lean said the third phase of development,
which adds an additional 135-megawatt generating unit, was moving along at
full steam.

"[The third phase] of this project will complete construction by next month
and then testing operations will begin," he said. "Royal Group will be
involved in the other phases [depending] on the increase of load demand."

Royal Group chairman Kith Meng declined to comment yesterday on the
company's financial commitments to the coal-fired plant, while numerous
calls to company representatives went unanswered.

A secretary for the general manager for CIIDG, who declined to give his
name, would not confirm whether Royal Group had made a firm financial
commitment to the project.

However, he said that CIIDG, which has a 33-year build-own-operate agreement
with the government, was selling electricity to the state energy utility
Electricite du Cambodge (EdC) for no more than 780 riel ($0.19) per kilowatt
hour.

"Sometimes we sell it for less depending on the demand and how productive
the plant is," he said.

Sin Samnang, administrative director for the Ministry of Mines and Energy in
Sihanoukville, said that he had yet to be notified about any new investment
decisions.

He said currently the coal-fired power plant was only 30 per cent
operational and that production capacity could reach as high as 900
megawatts once the development is fully complete. Samnang added that the
plant's operation had already helped to reduce Cambodia's persistently high
electricity costs.

"Over the past few years, we have seen the cost of electricity decline from
1,000 riel, to an average of 700 riel because of coal-fired power plants and
hydroelectric dams," he said.

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Ref:
http://www.phnompenhpost.com/business/sihanoukville-power-plant-draws-royal-
groups-interest

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com