Cambodia: Thai firm to energise Poipet industrial park

Cambodia: Thai firm to energise Poipet industrial park

Poipet PPSEZ Co Ltd, a wholly-owned subsidiary of Phnom Penh SEZ Plc and
operator of the soon to be completed Poipet Special Economic Zone (Poipet
PPSEZ), signed a memorandum of understanding yesterday with a leading Thai
energy provider to supply power to the 66-hectare industrial park.

The agreement signed with B Grimm Power Pcl, a member of Thai B Grimm Group,
offers the exclusive right to develop and operate power transmission
infrastructure through a power purchase agreement for Poipet PPSEZ, which is
in late-stage construction on the outskirts of Poipet. It also guarantees
the future right to construct power generation facilities for the industrial
zone.

Both parties will now conduct a feasibility study for the construction of an
initial 12.4 kilometre, 22 kilovolt transmission line connecting the SEZ
with Poipet's power substation, the two companies said during the signing
ceremony.

According to Preeyanart Soontornwata, president of B Grimm Power, the
initial investment amount will be between $2 million and $3 million, though
the company will provide more capacity according to the needs of the zone's
future tenants.

"For this particular project, the budget is not so big and for the first
phase it is about $3 million only, but in the near future we expect that we
can expand the substation and also generation [capacity] to provide more
reliable and more effective energy," she told reporters after the agreement
signing.

Lim Chhiv Ho, chairwoman of Phnom Penh SEZ Plc, said the power agreement
would allow for greater development of high-skill manufacturing, such as
electronics, in the Poipet PPSEZ. She added that the company was eyeing
investment from energy-intensive Japanese manufacturers, many of which
already operate out of the Phnom Penh SEZ.

"As Cambodia, through its industrial development policy, aims to attract
more manufacturers that produce high value-added products such as vehicle
assembly parts, electronics ... and electrical assembly parts, these
manufacturers cannot operate with unstable or disruptive electricity
supply," she said during the ceremony.

Representatives of both companies emphasised their optimism for the future
of Poipet as an industrial hub given its location on the Thai border and its
proximity to Thailand's largest seaport, Laem Chabang.

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com