Stable and quality electricity is needed to attract additional high-value-added manufacturing to Cambodia, but the quality of electricity in the kingdom remains a challenge for investors as the manufacturing sector continues to diversify.
Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia, said during the 2017 Cambodia International Business Summit that 87 Japanese companies are doing business in the country with six focused on garment and footwear manufacturing and at least 70 linked to electronics manufacturing.
He added that most of the Japanese companies operated in special economic zones (SEZ), with the majority in Phnom Penh and Bavet as well as some in Poi Pet.
“We are really working hard to supply the electricity in quantity, quality and price. We are moving day to day from not enough and expensive electricity to more than enough and less expensive electricity,” Mr. Chenda Sophea said.
“Soon we will have enough electricity and we will work on the price. In 2019 we will be self-sufficient of electricity without importing.”
Cambodia is currently diversifying its power sources by not only depending on hydropower plants and imported power, but by adding more coal-fired power plants and other sources of power to supply the country’s demands, according to Mr. Chenda Sophea.
“When we have enough electricity and enough transmission lines across the country, especially in the areas where there is economic activity, the price and the quality of electricity will be better. We are improving it,” he said.
Phnom Penh SEZ CEO Hiroshi Uematsu told Khmer Times that compared with Thailand, Cambodia does not have stable electricity. There needs to be plenty of stable and quality electricity at a competitive price to attract new manufacturing to Cambodia, especially in SEZs, he added.
“The quantity of electricity is not an issue, but the challenge is quality and instability. These are the challenges we have to overcome especially for high-value-added manufacturing,” he said.
Mey Kalyan, senior advisor to the government’s Supreme National Economic Council, told Khmer Times that to diversify SEZs, Cambodia needs to have quality electricity to supply the industry in order to achieve the government’s Industrial Development Policy 2015-2015.
“Quality electricity means that it has a strong and stable power, 24 hours supporting manufacturing per day and no up-and-down frequency. If we don’t have, it does not encourage foreign direct investment to Cambodia,” he said.
Chea Serey, director-general of the National Bank of Cambodia, said that manufacturing plays an important role in Cambodia. She said that the trend toward garment manufacturing was receding since there was much diversification happening in the manufacturing sector.
“In 2010, 88 percent of manufacturing consisted of garments, textiles and footwear while eight percent was electronics, components and assembly. But in 2016, 28 percent of manufacturing was in electronics and assembly while 23 percent was in garment and footwear,” she said.
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