AsianADB Boosts Cambodia's Green Transition with $82.5 Million for Clean Energy

The Asian Development Bank (ADB) has approved the second phase of Cambodia’s Energy Transition Sector Development Program (ETSDP), a substantial $82.5 million initiative designed to accelerate the Kingdom's shift towards a cleaner and more sustainable energy future. This move represents a significant step forward in Cambodia’s efforts to meet its ambitious renewable energy and energy efficiency targets.

The $82.5 million program, which is financed by several international partners including the ASEAN Infrastructure Fund, the Asia-Pacific Climate Finance Fund, the Green Climate Fund, and the United Kingdom through the ASEAN Catalytic Green Finance Facility, combines key policy reforms with targeted investment projects in innovative technologies.

The first subprogram, approved in 2022, successfully laid the groundwork by introducing critical policy measures that steered the energy sector toward greater efficiency and renewable energy development. Building on this foundation, Subprogram2 focuses on advancing regulatory reforms to strengthen the energy efficiency framework and provide greater policy clarity, which is essential to attract private sector investment.

A major milestone under the new subprogram is the introduction of Cambodia’s first set of regulations establishing Minimum Energy Performance Standards (MEPS) for electrical appliances. These new regulations will initially target air conditioners, which account for the largest share of household energy use in the country. By improving appliance efficiency, the government aims to reduce overall energy consumption and ease pressure on the national grid, contributing to a more stable and sustainable energy supply.

In addition to regulatory measures, Subprogram2 will launch an Energy Efficiency Revolving Fund^. This fund is specifically designed to help local small and medium-sized enterprises (SMEs) invest in energy-saving technologies. The fund will operate through a financial intermediation structure, enabling local banks to extend loans to SMEs for energy efficiency projects. By mobilizing domestic financial institutions, the initiative is expected to significantly scale up energy efficiency investments nationwide and strengthen the vital role of the private sector in the green transition.

"ADB is honoured to support Cambodia in its ambitious and transformative journey in the energy sector," said Anthony Gill, ADB Acting Country Director for Cambodia. "Through a comprehensive reform package, combining policy support with strategic investments, the Energy Transition Sector Development Program will support turning the government’s ambitious vision into reality." Mr. Gill added that the program aligns squarely with Cambodia’s national goal of achieving 70 percent renewable energy in its power mix by 2030, while maintaining affordability and supporting sustainable growth. Subprogram2 will pave the way for a third phase, expected in 2027, which will deepen reforms by expanding the energy efficiency regulatory framework and introducing technical standards for renewable energy and industry, ensuring a long-term commitment to a cleaner energy future for the Kingdom.