Can you explain us when and with which
purposes was created the Electricity Authority
of Cambodia?
EAC is a regulatory body, our function
is to issue the regulations and give licenses
to power service providers. We also review
and set the tariffs and when needed, we
resolve the disputes between supplier and
consumer, to control and impose the penalty
if they are wrong or against the rules.
We are fully independent from the government
and the ministry.
The Ministry of Industry, Mines and Energy
is working with the World Bank and ADB since
1994-1995 to create the Electricity Law.
This law has been prepared since 1995, it
was approved in 2000 and enforced in February
2001. Under the conditions of that law,
a national regulator should be established;
that agency is the Electricity Authority
of Cambodia (EAC). EAC is supported by loans
and technical assistance from the institutions
mentioned above and donor countries, which
are proposing to reform and liberalize the
sector. On this basis, we started to prepare
the rules and regulations for the sector.
In this role, the EAC stands in the middle
of the National interests, the investors'
or suppliers' interests and the consumers'
interests being all three different. Consumers
want cheap electricity with a certain degree
of quality; suppliers want to see a return
on their investment; and the national interests
are developed keeping in mind the whole
economy of the country. So we have to find
a balance for the three parties.
Can you share with us the main facts
and figures of the EAC?
The decision making body of the EAC has
three members. For licensing, establishment
of tariffs and dispute resolution, I cannot
decide by myself; it should be by vote.
What concerns the structure of the EAC,
there is a board, a chairman and an executive
director plus four departments. Currently
there are 38 employees, but soon we are
going to expand it to a total of 52 employees.
Our budget comes from licensing fees. The
government sets the fee and we use the fee
as our revenue. Currently the amount is
1 riel per kv/h.
As you mentioned, consumers want to
have access to cheap electricity. The price
of electricity in Cambodia seems to be a
major issue, as a regulating body, what
does the Electricity Authority do in order
to determine and control the tariffs of
electricity to better protect the interests
of the final consumers?
The price of electricity is indeed a key
point for us. Until now we have not started
the setting of tariffs. We need to make
a few studies because the tariff setting
affects all sides. This should be a fair
process. ADB will provide technical assistance
to make this study. We will then approach
the best way to satisfy suppliers and consumers.
Can you give us an average of the current
price of electricity in Cambodia?
There are actually three categories or
pricing systems. The first group is the
consumer in the capital, Phnom Penh, this
counts for 80% of the total consumption
of electricity in Cambodia and the average
price is 0.17 USD per Kw/h. The second category
is for the provincial cities where electricity
costs 0.25 USD per Kw/h., and finally there
is the third category comprising all the
rural areas outside the cities, in this
case the price fluctuates between 0.40 and
1 USD per Kw/h.
What are then your plans in terms of
pricing policy for the next years?
The main problem in Cambodia is the cost
of power generation. In Phnom Penh the generation
of power costs 13 cents and its distribution
4 cents. What concerns the rural areas,
the suppliers for those areas are private
entrepreneurs who have their own small generator.
The National utilities cannot reach those
areas and that is what makes electricity
so costly. We are concentrating our efforts
into helping to bring down the generation
costs in order to achieve lower electricity
costs. A simple example is Thailand, they
generate by themselves or import from Lao
at a cost of about 4 cents and the cost
to transmit and distribute to the end user
is about 3 cents, making a total cost of
7 cents Kv/h., something that cannot be
compared with Cambodia.
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One of your
main objectives is "to create favourable
conditions for capital investment in the commercial
operation of the electricity sector".
Can you tell us which are or will be those
conditions in order to attract investment
in the Cambodian electrical sector?
Big consumers like hotels and factories
are using their own power generation capacity.
How can I attract them to purchase from
EDC (Electricité de Cambodge)? The
first step is to lower the tariffs in a
way that it become more attractive for them
to buy power from EDC than generate it themselves.
To obtain that, our strategy is to bring
in cheap power by connecting our systems
to neighboring countries like Vietnam. Then
we will offer potential investors bidding
opportunities in the energy sector. First
we will interconnect the system, then we
will increase the amount of users and finally
we will propose investment possibilities.
Which parts of the electrical power
sector are you more interested into promoting
and how do you want to do it?
Now that the implementation plan has been
set, we are ready to go ahead; the agreements
with Vietnam have been signed and the project
to construct the transmission line from
Phnom Penh to Vietnam is open for bidding.
Now we are handling the process to finance
the project. The ADB has agreed to provide
financing of a loan for the transmission
line. Currently this is being reviewed and
in four or five months the bidding will
be open.
Renewable energies are getting more
and more attention in Cambodia. Which role
do they play in the national supply development
and which actions are the EAC taking in
order to promote their development?
Renewable energy plays an important role
in the rural electrification. The people
who stay in the rural areas have difficult
access to cheap electricity. This could
be obtained only by connecting themselves
to the national grid. There are two ways
to provide less expensive electricity; one
is by extending the national grid and the
other by developing stand-alone systems.
Solar, wind, or micro hydroelectric projects
can all be effectively used in such isolated
areas. We must speed up and simplify the
process of licensing and tariffs setting.
Can you tell us a little bit about yourself
and your professional background?
I started working in the Ministry of Industry,
Mines and Energy in 1986. After that, I
came to Electricité du Cambodge,
the national electricity supplier, which
at that time was a department of the Ministry.
I started to be promoted from young engineer
to head of the group, then division, and
then head of unit to finally become deputy
managing director. After that, in 2001 I
was nominated to be the Chairman of the
EAC.
What would be your final message to
potential investors interested into the
energy sector of Cambodia?
One of our functions is to attract investors
towards the energy sector in Cambodia. The
main subjects an investor wants to know
about are the following: First, an investor
wants to minimize risk for his investment;
Second, all conditions have to be set by
the law without changes afterwards as it
can affect dramatically in their business
plans and third, an investor wants to have
clearly stated the rules of the game. Those
are the points that the EAC tries to provide.
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