The Asian Development Bank (ADB) has signed an agreement to provide a US$7 million loan without government guarantee to build transmission lines to import electricity from Thailand into Cambodia, including to the tourism hub of Siem Reap, and the growing cities of Battambang and Banteay Meanchey where there have been power shortages.

The development will be a boost for the economy of northwest Cambodia, not just in tourism but also in agriculture, services and manufacturing. ADB financial assistance is being made to the (Cambodia) Power Transmission Lines Co. Ltd. (CPTL), a private Cambodian company.

ADB’s assistance will go toward the estimated $34 million total project cost. The balance of funding is being provided through equity and loans from the Export-Import Bank of Thailand, Foreign Trade Bank of Cambodia, and a wholly owned subsidiary of Gramercy Advisors/Arco Capital Management Family of Funds.

“This will give the region access to a constant supply of inexpensive and reliable electricity, which is essential for economic growth," said Jo Yamagata, a director with ADB's Private Sector Operations Department. "We are pleased to have worked closely with the Export-Import Bank of Thailand, Arco Capital and Foreign Trade Bank in achieving this milestone."

"This is a momentous occasion as we attracted a top international and local lending syndicate to support what is the first private cross-border, high-voltage transmission line project in the Mekong Region built to world-class standards," said Ly Say Khieng, chairman and CEO of CPTL. "The project will bring many benefits to Cambodia."

The 115-kV power lines will connect with Thailand’s national grid at the border. They will then run about 221 km into Cambodia, mainly alongside National Road 5 and National Road 6 to Siem Reap and Battambang. In addition to connecting the major towns, the new lines will provide opportunities to wire rural communities along the route.

The high-voltage grid lines will be the first to be privately owned in the Greater Mekong Subregion. It is the first ADB private sector infrastructure project in Cambodia.

Northwest Cambodia, like the rest of the country, suffers from insufficient and unreliable power. There is no national grid and electricity is generated almost exclusively by small diesel plants that generate relatively high emissions. This hinders Cambodia’s ability to attract investment and promote sustainable economic activities, which are critical to reducing poverty.

Electricity in Cambodia is among the most expensive in the region because of the disaggregated and isolated small-scale systems.

Siem Reap is home to the famed Angkor Wat temples and is an important and growing tourism center. Many hotels in the area rely on their own power generators. There are similar power shortages in neighboring Battambang, an important agricultural center, and Banteay Meanchey, which supports manufacturing and trading activities.