A special economic zone (SEZ) in Poipet City has decided to import electricity from Thailand to ensure a reliable power supply as it expects the influx of more factories and investment.
Poipet PPSEZ Co Ltd reached a memorandum of understanding (MoU) with Thailand-based B.Grimm Power Plc to build power transmission lines from Thailand to the zone in Banteay Meanchey province at an initial total investment cost of about US$3 million.
Under the MoU, B.Grimm will build 12 kilometres of power transmission lines that will send 22 kilowatts of electricity to the Poipet PPSEZ, according to Khmer Times.
The joint venture is important for the zone as it will help supply reliable electricity and bolster confidence among potential investors, Lim Chhiv Ho, chairwoman of the Phnom Penh SEZ, which owns Poipet PPSEZ, said Monday at the MoU signing ceremony.
"We want to have reliable electricity so new investments and factories will come to the zone," she said.
"B.Grimm is well-known as a company that provides reliable power in Thailand. We want investors to be confident knowing the zone is cooperating with a large partner to import electricity."
The Thai company also offers a cheaper price compared with local providers, Ms Chhiv Ho added.
"In order to attract industries that produce products like auto components and electronic components, we must have reliable power," she said. "B.Grimm is a provider of reliable power that will help the zone operate."
B.Grimm Power president Preeyanart Soontornwata said the investment in the first stage was small, but the company would expand in future by installing a sub-station and increasing power-generation facilities in the zone.
"We believe that in the future there will be more customers in the zone using our imported power but we need to have trust from industrial investors. If they have reliable power, it will attract more customers," she said.
Located on 65 hectares, about 6km east of the Poipet City centre -- with access to one of the key border crossing points with Thailand in northwestern Cambodia -- Poipet PPSEZ has 11 factories now in operation with four Japanese factories set to begin operations this year.
Most of the products manufactured in the zone are electronic components destined for Japan and other countries.
Mey Kalyan, senior adviser at the government’s Supreme National Economic Council, said the MoU will enable Cambodia to have reliable power for industrial investment.
"I think investors are waiting at our door but because we don’t have reliable power, they don’t step in," he said.
"If we have reliable power for their industrial manufacturing, they will come and generate jobs for Cambodian people who can upgrade their labour skills from those factories."
Added Mr Kalyan: "If Cambodia has reliable electricity for industrial factories and sufficient infrastructure, more foreign investors will come because Cambodia has lower paid labour compared with Thailand."