The Asian Development Bank ( ADB ) has approved the second phase of Cambodia’s Energy Transition Sector Development Programme for US$82.5 million.

The programme, financed through the Asean Catalytic Green Finance Facility, aims to support the country’s clean energy transition by combining policy reforms with investment projects in new technologies, ADB says in a statement released on October 7.  

The first phase, approved in 2022, focused on measures that guided the sector towards a more efficient and renewable development pathway.

Attracting private investment

The second phase advances regulatory reforms to strengthen energy efficiency and enhance policy clarity to attract private-sector investment. It is co-financed by the Asean Infrastructure Fund, the Asia–Pacific Climate Finance Fund, the Green Climate Fund, and the United Kingdom.

A key milestone is minimum energy performance standards for electrical appliances, starting with air conditioners, which account for the largest share of energy consumption in the residential sector.

The second phase will also establish an “energy efficiency revolving fund” to facilitate access to finance for smaller firms to invest in energy-efficient technologies.  

The fund will encourage local banks to extend loans to small and medium-sized enterprises ( SMEs ) for such investments.

By mobilizing domestic financial institutions and supporting SMEs, the ADB expects the fund to accelerate the nationwide scale-up of energy efficiency investments.

Renewable energy goal

Anthony Gill, the bank’s acting country director, says the programme aims to“support turning the government’s ambitious vision into reality”.

“This includes the goal of achieving 70% renewable energy in the power mix by 2030, along with a strong commitment to advancing energy efficiency, which is essential to ensure that Cambodia’s growth remains both sustainable and affordable,” he adds.

The second phase will be followed by a third in 2027, “which will further deepen reforms by expanding the energy efficiency regulatory framework and introducing technical standards for renewable energy, buildings, and industry to further attract private sector investment”, ADB says.