Key Points

Cambodia has not attracted significant investment in renewable energy until mid-2020 and, unlike other ASEAN countries, has not set exact renewable energy targets. Despite this, the country is viewed as a model to learn from for other ASEAN countries implementing solar power auctions. Cambodia successfully launched its auction system in 2019 and has received positive feedback from investors and international donors. When adopting the auction system, Cambodia introduced measures such as the provision of land, infrastructure and financial mechanisms for investors. One of the auctions resulted in the lowest photovoltaic power purchase tariff in Southeast Asia in 2019 (USD 38.77 per MWh). This should send an encouraging message to other ASEAN countries to adopt auction mechanisms for renewable energy development.

In order to keep up this momentum and attract more investment, Cambodia needs to address a number of persistent gaps in its investment climate. Among the major issues it needs to address are governance capacity gaps and the lack of an advanced regulatory framework for renewable energy. Cambodia is ranked no 60 out of 156 countries in the Index of Geopolitical Gains and Losses after energy transition (GeGaLo Index) and thus needs to improve its capacity for renewable energy governance. With this in mind, we propose five actions that may have strong immediate benefits and make Cambodia’s business climate for renewable energy more attractive.

Action plan to attract investment in renewable energy in Cambodia

• Prioritise renewables in the energy governance system
• Request support from IRENA for capacity building
• Adopt targets and develop a regulatory framework
• Enhance project bankability
• Improve market entry for foreign investors