Studies
Power generation. Rural electrification N/A
Evaluation of Opportunities for financing Power Distribution and Rural Electrification through Public Private partnerships
| Country : | Cambodia . |
| Client : | Ministry of Industry, Mines and Energy of Cambodia (MIME) . |
| Start Date : | April 2011 |
| Completion Date : | November 2011 |
| Value of services : | 50 000€ |
| Funder : | AFD (French Development Agency ) |
| Associate/Partner : | CCDE (Cambodia Consulting Development Engineering) |
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| Description : |
The objective of the study is to design a financial support to Rural Electrification Entreprises (REEs), specifying their investment needs and assessing bankability of projects. In order to reach Government targets over the next 8 years, 140M$ in MV backbone financing would be required, 180M$ for LV distribution in villages, 70M$ in generation for mini grids, 20M$ for standalone PV. Economic models for each project type were developed. There are globally over 300 REEs in Cambodia mostly holding “consolidated” licenses (generation + distribution in mini grids) but the 50 largest are so called “distribution” licensees buying power in bulk from the national grid. Financial characteristics of the proposed investments were analysed as well as the profiles of the REEs themselves to assess their bankability in a context where Cambodian banks seldom lend for terms beyond 8 years, generally at interest rates from 9 to 17%, and with very high collateral requirements. |
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| Description of the Actual Services Provided | • Database analysis with a Geographical Information System on REEs • Segmentation and characterization of business: volume of kWh sales, number of clients, sales tariff, bankability of their business • Evaluation of the type of financial instruments needed for funding MV backbone lines, distribution MV and LV lines, standalone PV, renewable energy generation for minigrids • Contacts with banks (development, public and private sector) to assess their appetite for the business, instruments they have, instruments (long term refinancing, risk sharing mechanisms, …) which would provide the kind of incentives needed for them to engage. • Extensive stakeholder consultations with the regulator, utility, rural electrification fund, ministry, … to propose the effective measures • Recommendation on the characteristics of the financial support scheme to develop, in order to overcome barriers of weak balance sheets of REEs, high interest rates |