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Background

The REF is one component of the Rural Electrification and Transmission (RE&T) project funded by the World Bank and Asian Development Bank (ADB).  This parent project includes construction of a high voltage transmission line to import power from Vietnam, extension of grid networks, and a range of institutional capacity building activities. Click here for more information on RE&T Project.
 

Current Status

The loan for the establishment of the REF will be available once the new government of Cambodia is finalized. 
 

REF Objectives

The direct objective of the REF is to accelerate the rate of rural electrification and reduce the economic cost of supply.  This forms part of the broader objectives of the RE&T project which are to:

a)       improve power sector efficiency and reliability and reduce electricity supply costs;

b)       improve standards of living and foster economic growth in rural areas by expanding rural electricity supplies; and

c)       strengthen electricity institutions, the regulatory framework and the “enabling environment” for sector commercialization and privatization.
 

REF Mechanism

The REF will call for proposals from private developers to implement rural electrification solutions in particular nominated areas, consisting of either:

a)       New mini-grids based on generation from diesel, solar or hydropower generation;

b)       Extension of an existing small grid systems to connect new households;

c)       Solar Home Systems (SHS); or

d)       Mini or Micro hydropower system.

Proposals will be selected according to eligibility criteria (see below).  Successful proposals will receive an REF grant (see rates below) which is expected to contribute approximately a quarter of the total project investment costs:

            REF Grant                     25%

            Private Equity                25%

            Bank Loan                     50%

The intended effects of the REF grant is to reduce the capital cost and thus the retail cost of power in rural areas and also, combined with an operating licence from the Electricity Authority of Cambodia (EAC), to enable the proponent to successfully obtain the remaining finance from a private finance institution.  Technical assistance will be provided to further assist proponents to secure appropriate debt finance (see TA below).
 

Subsidy Rates

REF Targets

•          45,000 new connections to rural grids by Rural Electricity Enterprises (REE)
   

•            6MW of new Mini Hydro
   

•            12,000 new Solar Home Systems
   

•            850kW of new Village Hydro
   

•            5% of national installed capacity from Solar and Hydro
   

Pilot Phase

6-10 sub-projects will be tested out in the initial phase of the REF in 3-4 provinces.   The project criteria for the initial phase will require:

•       Effective license issued by EAC with a duration of not less than 5 years;
   

•       Economic least-cost option in the area;
   

•       Variety in fuel source (including at least 1 solar system, 1 hydro scheme);
   

•       Variety in size (1 provincial town, 1 district, and 1 commune);
   

•       Number of consumers should not be less than 300; and
   

•        Installation of 300 Solar Home Systems (SHS).
   

Technical Assistance

The REF will also implement the following Technical Assistance (TA) activities designed to maximize the effectiveness of the REF in achieving its objectives:

a)       Implementation Support for the REF;

b)       Rural Income Generation Promotion;

c)       Renewable Energy Business Development for Solar and Mini/Micro Hydro;

d)       REE Improvement and Association Building; and

e)       Capacity Building of Financial Institution

See the Technical Assistance page for details on each of these activities.
 

REF Finances