Power sector developments and challenges
The Royal Government of Cambodia formulated an energy sector development policy in October 1994 with the objectives:

• ““To provide an adequate supply of energy throughout Cambodia at reasonable and affordable price,
• To ensure a reliable, secure electricity supply at prices, which facilitate investment in Cambodia and development of the national economy,
• To encourage exploration and environmentally and socially acceptable development of energy resources needed for supply to all sectors of the Cambodian economy,
• To encourage efficient use of energy and to minimize detrimental environmental effects resulting from energy supply and use. (2)”

In 2001, the Electricity Law was established in Cambodia which required the Ministry of Industry, Mines and Energy to administer policies, strategies and plans related to the power sector.  Under this Law, the autonomous Electricity Authority of Cambodia was established to monitor and regulate the power sector in Cambodia. The Electricity Law and EAC were steps taken to from an independent regulatory framework to improve the efficiency and the availability of electric power services in Cambodia. The EAC is responsible for regulation of both private and public suppliers of electricity including Electricité du Cambodge. It regularly reviews the tariffs and charges to ensure they provide electricity at reasonable prices consistent with ensuring an adequate return to investors in the supply of electricity. 

Other aims of the law include supporting commercial development and competition in the power sector, enabling private ownership of facilities, protecting consumers, providing a basis for regulating the power supply in Cambodia and providing the principles for granting the rights and obligations to generate electricity.

The Government, with support from the international community, has started to restore electricity infrastructure which was damaged due to historical conflict. The electric power supply systems in Cambodia tend to be isolated systems with more than 90 per cent of electric power generation from diesel generators (3). With its electrical power sector still in the early development stage, all systems are isolated and there is no national grid system. One of the major challenges facing the power sector for Cambodia is to start developing a grid system in major provinces in the Southern and the Northern regions, which is proposed to be linked by 2020.

Electricity prices in Cambodia are high due to small isolated generation systems which are completely dependent on expensive imported fuel. The lack of an interconnected system and high distribution losses also contributes substantially to these high prices.

Rural electrification
Currently, rural electrification has been addressed by the private sector. While 85 per cent of population live in rural areas, the rural electrification rate stands at 13 per cent, with batteries providing most of the power. In terms of renewable energy, there is a high potential for hydropower in North-eastern region, but another challenge facing the power sector is the difficulty in mobilizing public funds to realize the renewable energy potential.

The Royal Government of Cambodia issued a Royal Decree to establish the Rural Electrification Fund (REF) to help electrify rural sectors. The objective of the REF is to promote the equitable rural electrification by facilitating the population’s access to affordable electricity with an overall goal of poverty reduction (4).

Environmental Management
The “Environmental Protection and Natural Resources Law” was enacted in 1996 to ensure that all projects are subject to an environmental impact assessment (EIA). Environmental management for power projects require a systematic approach to protect against air, soil, water and noise pollution, vibration and radiation, and impacts to the flora and fauna(5) .

Stakeholders
Electricity Authority of Cambodia
Electricite Du Cambodge
Ministry of Industry, Mines and Energy
Cambodia Renewable Energy and Rural Electrification

(2) Royal Government of Cambodia, Ministry of Industry, Mines and Energy, “Cambodia Power Sector Strategy 1999 – 2016”, (1999).
(3) Electricity Authority of Cambodia, Report on the Power Sector of the Kingdom of Cambodia for year 2005, (2006), accessed from the website http://www.eac.gov.kh/pdf/report/Annual%20Report%202005_Eg%20Ver3.pdf in September 2007.
(4) Cambodia Renewable Energy and Rural Electrification, http://www.recambodia.org/ accessed in October 2007.
(5) Royal Government of Cambodia, Ministry of Industry, Mines and Energy, “Cambodia Power Sector Strategy 1999 – 2016”, (1999)