15 Years of Financing Rural Power Grid Development in Cambodia

This photo provided by the Export-Import Bank of China shows the completed rural power grid project in Cambodia.

With more than 70% of its population engaged in agriculture, Cambodia's rural areas have long been constrained by power shortage and high electricity prices. Leveraging the China-Cambodia Diamond Hexagon cooperation framework and aligning the Belt and Road Initiative with Cambodia's Pentagonal Strategy, the Export-Import Bank of China championed "small and beautiful" projects, adopting innovative financing models and flexibly utilizing multiple currencies.

Over the past 15 years, the bank has supported Cambodia's rural power grid development through a "phased implementation + progressive advancement" approach, delivering more than 10,000 kilometers of medium voltage transmission lines. This has boosted rural electrification rates and enabled farmers to access affordable clean electricity. The project was recognized by China's National Energy Administration as a Best Practice in "Small and Beautiful" International Energy Cooperation (Green Finance).

Key Challenges

Cambodia is rich in hydropower and solar potential, but its power grid has limited capacity to integrate renewable energy. Power infrastructure projects feature long investment cycles and substantial funding, requiring sustained investment to achieve scale. Rural areas suffer from low grid coverage and insufficient power supply. Compounding these challenges, the lack of mature engineering technology and management standards poses difficulties for both grid construction and long-term operation and maintenance.

Solution Pathways

Over 15 years of sustained investment across eight phases, the project secured stable financing primarily through export buyer's credit, supplemented by counterpart funding from the Cambodian government. Chinese manufactured electromechanical equipment was adopted alongside engineering technologies, management standards, and professional services, and operation and maintenance training was provided to ensure long-term sustainability. The gradually densified rural power grid has paved the way for the large-scale integration of renewable energy in rural Cambodia.

Practical Benefits for Local Communities

Covering 24 provinces across Cambodia outside Phnom Penh, the first seven phases of the project have connected 251,000 rural households to electricity, reducing reliance on diesel generator usage in rural areas and opening channels for Cambodia's renewable energy to reach the countryside. Following grid connection, electricity prices dropped from USD 1/kWh to USD 0.2/kWh. The project provided more than 1,000 jobs during the construction period and will provide around 450 long-term operation and maintenance positions after completion.