Botum Sakor Energy Co Ltd (BSE) on November 18 struck a contract with Shenzhen-listed Sinosteel Engineering & Technology Co Ltd (SET) for the engineering, procurement and construction (EPC) of a 700MW coal-fired power station in southwestern Koh Kong province, Yicai Global reported on November 19.
BSE is a wholly-owned subsidiary of the Kingdom’s largest conglomerate, Royal Group of Companies Ltd, while SET is a wholly-owned subsidiary of Beijing-based state-owned enterprise Sinosteel Corp.
As outlined in the EPC contract, Yicai Global said, once it secures payment, SET will present the design and will procure and supply the equipment and materials, as well as provide construction, installation and commissioning services.
Citing an SET statement, the Shanghai-based financial news portal said the total contract value is to the tune of about $1.1 billion.
The contract covers the construction of two new 350MW engine units and ancillary generation and transmission facilities, as well as a dedicated coal terminal, it said.
Construction of the first unit is scheduled to be completed within 36 months of breaking ground, with the second unit slated to be finished 12 months later, it added.
Koh Kong deputy provincial governor Sok Sothy told The Post on Sunday that the provincial administration has yet to receive a construction schedule for the project and confirmed that construction activity had not begun.
According to a sub-decree issued on August 6, the government granted 168ha in Botum Sakor National Park in Koh Kong to the Royal Group to build the power station.
The project will require $1.34 billion in capital investment and will be online in 2023 or 2024. Of that, 30 per cent will come from direct capital and 70 per cent will be from bank loans, the sub-decree said. The project will be developed under a 35-year build, own, operate (BOO) model.
It said the Ministry of Environment has to work in collaboration with the Ministry of Economy and Finance and others to prepare the deal.
Victor Jona, director-general of the Ministry of Mines and Energy’s General Department of Energy, in August said the government needs to diversify energy production to include other sources and ensure stable electricity supply in Cambodia.
He said that without exception, the government assumes the ultimate responsibility in reviewing the socio-environmental impact of every development project in the power sector.
“All in all, we need to expand our energy portfolio to include a plethora of sources, inter alia, hydropower, coal and solar to ensure the supply to consumers, be they citizens, industries, cottage industries or service providers,” Jona said.
According to Electricite du Cambodge, peak electricity demand in the country is expected to increase to 2,300MW this year and hit 2,500MW by next year.
Cambodia consumed a total of 2,650MW of electricity in 2018, an increase of about 15 per cent compared to 2017, according to official statistics from the energy ministry.
The Kingdom’s electricity demands are currently covered by hydroelectricity and coal power, accounting for around 48 per cent and 47 per cent of generation, respectively.
Jona told The Post early this month that electricity demand in the Kingdom retreated between 10 and 12 per cent this year due to Covid-19-induced economic shocks in key sectors – above all in garment manufacturing.
On the Shenzhen Stock Exchange, SET’s share price fell 0.04 yuan (0.61 US cents) or 0.94 per cent to close at 4.22 yuan last week for a market capitalisation of 5.30 billion yuan, with 17.08 million shares traded.