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US Ambassador Warns of Energy Crunch

In the coming years, Cambodia will face some of the most expensive energy prices in the region and will suffer from a lack of energy that could hurt economic growth, US Ambassador Carol Rodley said Wednesday.

Rodley was speaking at a conference in Phnom Penh on energy development for the Greater Mekong sub-region, which ended Wednesday.

A number of energy companies, including General Electric and Chevron, as well as ConocoPhillips, AES, Schlumberger, Dupont and Rockwell Automation warn that Cambodia continues to suffer from the lack of energy resources and needs energy supplies for promoting economic growth.

“Energy prices here are amongst the highest in Asia, and connectivity is one of the lowest,” Rodely said.

The Greater Mekong subregion includes Burma, Cambodia, Thailand and Vietnam and the Chinese provinces of Guangxi and Yunnan.

“GMS energy infrastructure will require billions of dollars of investment if energy supply is to keep pace with energy demand,” Rodley said. “In the next decade, the demand for energy at national levels is expected to continue to rise between 7 percent and 16 percent per annum. The challenges facing the GMS in the energy sector are not unique: high economic growth of the region is driving the demand for energy, whereas almost 50 million people in the GMS lack access to electricity.”

Phalla Phan, undersecretary-general of the Supreme National Economic Council, recognized that energy prices in Cambodia are very high compared to its neighbors.

The average energy price in Cambodia is $0.16 per kilowatt-hour, but that price can rise as high as $0.90 per in rural areas.

“The government must rethink its energy policies to reduce energy price, just like its neighbors,” said Yim Sovann, spokesman for Sam Rainsy Party. “It affects our economic growth and the living of people, if the government does not reduce energy price.”

Ty Norin, head of the Electricite du Cambodge said the government has many plans to develop the energy sector and achieve the right price.

“We have a major goal to develop more than enough in an improved and effective energy sector compared to the past,” he said.

Rodley said the development of the energy sector in one country would benefit the development of all in the region, adding Cambodia “has ambitious plans to expand the country’s electrical production and connectivity.”

“The GMS economies are undergoing multiple transitions: from agriculture to industry and services, and rural to urban migration,” she said. “These transitions will drive energy demand growth in coming decades.”