Facilitating ESCO investments in Cambodian SMEs

Cambodia has seen a rapid industrial sector growth of 8% between 2009-2016. Simultaneously, its energy usage between 2010-2015 has increased by 11%. Cost of electricity from the Cambodian national grid is the highest in South East Asia. Electricity accounts for a disproportionate share of manufacturing costs. Other cost drivers are the usage of old, inefficient machinery with high maintenance cost. GGGI’s 2018 audits of Small and Medium Sized Enterprises (SME) show that factories can achieve double-digit energy cost savings – with payback time often not more than a few months. Interventions to promote energy and resource efficiency and drive down production costs for industrial manufacturing translate into a significant potential for GHG emission reduction sector wide and a potential for creating over 500,000 jobs (GGGI, 2018). The lower production costs would boost the competitiveness of Cambodian manufacturing within the sub-region. GGGI Cambodia estimates it can access around 40 SMEs which under-used energy audits of this kind. GGGI Cambodia aims to use these audits to mobilize ESCO investments proximately 3-5 million USD for an aggregated demand from SMEs. GGGI Cambodia aims to achieve the following deliverables: i.)Investment pipeline, business model and transaction structure of energy efficiency projects for manufacturing SMEs built ii.)Guarantee scheme designed iii.)Private investment of 2-3 million USD committed to energy efficiency projects in manufacturing SMEs through ESCO projects.