Cambodia: Government approves law to guarantee energy purchase

Cambodia: Government approves law to guarantee energy purchase

The National Assembly approved a draft law yesterday that will guarantee the
state's purchase of electricity from two large-scale private energy
projects, protecting the investments against any loss resulting from
political instability.

The proposed legislation mandates a power purchase agreement for electricity
distributed by a 220-kilometre transmission line that Alex Corporation is
building to connect the Stung Tatai hydropower dam in Koh Kong province to
Phnom Penh, and energy produced by a 150-megawatt coal-fired plant that
Cambodian Energy II Co Ltd (CEL2) is developing in Preah Sihanouk province.

According to a National Assembly announcement, the law would guarantee that
the government would purchase all power transmitted or generated by each
project regardless of whether or not the state-owned Electricite du Cambodge
(EdC) has the financial capacity to do so. The legislation authorises the
Ministry of Economy and Finance and the Ministry of Mines and Energy to
purchase any excess energy from the two projects.

"The government will provide two types of guarantees that include a purchase
agreement of electricity in case EdC cannot pay, and to guarantee the
purchase of the infrastructure investment from the projects in the case that
the companies cease operations due to political instability," the
announcement said.

The announcement also gives Alex Corporation room to double its project
design, increasing its planned 230-kilovolt line to 500 kilovolts under the
existing contract.

In February, the Council of Ministers gave Alex Corporation a green light to
develop its $136 million transmission line project. The project is expected
to be completed within three years. The $260 million CEL2 coal-fired plant,
announced at the same time, is scheduled to be completed by late 2019.

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Link to Original Article:
http://www.phnompenhpost.com/business/government-approves-law-guarantee-ener
gy-purchase

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com