Cambodia Investment Review
The Asian Development Bank (ADB) has approved the second phase of Cambodia’s Energy Transition Sector Development Program (ETSDP), valued at $82.5 million, to accelerate the Kingdom’s shift toward cleaner and more sustainable energy sources.
The new funding, cofinanced by 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, builds on the success of the first phase approved in 2022. The initiative combines policy reform with targeted investments to foster innovation and private sector engagement in Cambodia’s energy transition.
Strengthening Policy and Regulatory Frameworks
Subprogram 2 focuses on advancing Cambodia’s energy efficiency regulations and creating a more transparent environment for private investment. A central reform is the introduction of Minimum Energy Performance Standards (MEPS) for key electrical appliances, beginning with air conditioners—the largest source of household energy consumption.
ADB said these policy improvements will help Cambodia reduce energy costs and improve overall efficiency while aligning with the government’s renewable energy goals.
Launching the Energy Efficiency Revolving Fund
A major component of the program is the establishment of an Energy Efficiency Revolving Fund designed to support small and medium-sized enterprises (SMEs). Through partnerships with local banks, the fund will provide financing options for SMEs to adopt energy-efficient technologies.
This structure is expected to mobilize domestic financial institutions and encourage widespread adoption of cleaner energy solutions, positioning Cambodian SMEs as drivers of sustainable growth.
“ADB is honored to support Cambodia in its ambitious and transformative journey in the energy sector,” said ADB Acting Country Director for Cambodia Anthony Gill. “This program will help translate the government’s vision into reality, including the goal of achieving 70% renewable energy in the power mix by 2030. Enhancing energy efficiency is essential to ensuring Cambodia’s growth remains both sustainable and affordable.”
Toward a Sustainable Energy Future
The ETSDP’s third phase, set for 2027, will expand Cambodia’s energy reform agenda further by introducing technical standards for renewable energy, buildings, and industrial efficiency. The upcoming phase will also deepen regulatory reforms and attract additional private sector investment to strengthen the country’s energy transition pathway.
Since its establishment in 1966, ADB has been a key development partner across Asia and the Pacific, supporting infrastructure, climate resilience, and inclusive growth. The bank, owned by 69 member countries—50 from the region—continues to play a leading role in financing Asia’s shift toward cleaner and more sustainable economies.
