Programme profile

3i Cambodia: Investing in Infrastructure

Programme Index Listing

Location
Cambodia
Main implementer
Palladium
Donor
DFAT
Duration
2015 - 2020
Total budget
US $33.7 million (approx.)
Annual budget
US $7 million
Contact
info@31cambodia.org
External links
3i Cambodia website
Resources
Market diagnostics
Cambodia electricity sector overview
Results and reviews
Scalability review: 3i Investing in Infrastructure
Technical reports / analysis
Gender research in infrastructure

Project description / objective

To unlock opportunities for economic growth and trade by increasing investment in private sector led small-scale infrastructure - and to increase households and business’ access to basic utilities, including:

  • piped treated water
  • the electricity network
  • solar energy

Market system focus

Piped Treated Water Infrastructure

In 2017 only around 30 per cent of Cambodian households have access to piped clean water. The majority of these are in urban areas.

To achieve Sustainable Development Goal 6 the Royal Government of Cambodia (RGC) has actively encouraged private sector investment in piped treated water infrastructure. However, so far, most private investment in this infrastructure has only been in urban and semi-urban areas. Return from investment in more rural areas is not attractive enough.

Expansion of infrastructure is further constrained by limited technical knowledge in infrastructure design and operation.

Electricity Network

At the end of 2017 the electricity network covered 80 per cent of Cambodians households. The remaining 20 per cent receive unreliable and more expensive energy from solar panel and batteries.

To achieve Sustainable Development Goal 7 the RGC has encouraged private sector investment in electricity infrastructure. Investment in electricity networks has increased more rapidly than piped treated water infrastructure. However, due to low investment return, remote areas are being left out.

Renewable energy policy development

A large increase in energy production is expected as a result of steady economic growth.

Cambodia has good potential for harnessing solar energy. However, Cambodia currently does not have a clear policy for developing investment in solar energy. This has deterred investment in green energy - investors find it risky to invest in an area where there is no clear legal framework.

3i is assisting the RGC in conducting a study on the potential for renewable energy generation with an aim to develop a proper renewable energy policy. The result of the study and the policy will enable the Ministry of Mines and Energy to incorporate renewable energy as part of the country’s national energy planning.

Programme interventions

Piped Treated Water Infrastructure

3i is providing Viability Gap Funding to stimulate private sector investment in piped treated water in more rural area where there are no current investment prospects.

  1. Provision of a grant and technical support to unlicensed piped water operators to establish, improve and extend their piped treated water infrastructure to more rural areas and to obtain a license from the Ministry of Industry and Handicraft. 
  2. Support for license tendering to supply piped treated water to greenfield sites. Includes providing administrative support to the Ministry of Industry and Handicraft to process the tender and technical and financial support to the winning tender to establish piped water infrastructure.
  3. Support to the Ministry of Industry and Handicraft to provide technical training to all licensed operators to improve the operational efficiency of their piped treated water infrastructure.

Electricity Network

  1. Provide Viability Gap Financing to electricity companies to expand their electricity network to more remote areas where there are no current investment prospects.
  2. Provide connection subsidies to poor households, via electricity companies, to improve slow connections to available electricity networks.
  3. Provide support to the Electricity Authority of Cambodia to certify its testing operation according to the ISO standard - and serve as the basis for testing and calibration of solar and other renewable energy equipment.

Renewable energy policy development

Provide technical support to the Ministry of Mines and Energy to conduct a study to understand the potential for renewable energy and to develop a renewable energy policy.

Notable results (systemic change, poverty impact)

Piped Treated Water Infrastructure

By the end of June 2018, 3i Cambodia had:

  • signed contracts with 53 piped treated water companies who will enable 155,000 households to access piped clean water
  • leveraged US $15.6 million of private investment with a 3i-company ratio of 1-1.5.

Electricity Network

By the end of June 2018, 3i Cambodia had signed contracts with 18 electricity companies who will enable 33,000 households to access the electricity grid.

Renewable energy policy development

Creation of a technical working group, with representatives from all relevant government departments and 3i Cambodia, to work on determining the Terms of Reference to select a company to conduct the study on Cambodia’s potential for renewable energy.

[published Sept. 2018]

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