PESTECH Dreams Big in Cambodia’s Power Industry

• 12 November 2017
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While Cambodia hungers for increased megawatts of power capacity, Malaysian-owned power infrastructure provider Pestech International Berhad has increased its involvement in the kingdom’s power development in recent years and is aiming bigger after it won an international prize awarded for best structural design and build in utilities and transmission.

Pestech, through its subsidiary Pestech Cambodia Limited (PCL), was granted the contract by Cambodia’s Electricite Du Cambodge (EDC) in 2015 to build a substation in Kratie province and transmission line connecting the power supply from the Lower Sesan II Hydropower plant located in the Kingdom’s northeastern province Stung Treng with the capital city Phnom Penh.

The project designed and constructed by the Malaysian firm was awarded a Be Inspired prize for best structural design and construction of the Year in Infrastructure 2017, a global conference annually organised by American infrastructural software developer Bentley and hosted in Singapore from 9 to 12 October.

Speaking on the sidelines of the conference exclusively with Construction & Property Magazine, Mr. Chong Kuen Wai, Pestech General Manager, explained that the firm is eyeing Cambodia as its headquarter on the South East Asian mainland – called Indochina as it is more broadly involves in power business in the kingdom.

“Pestech is planned to diversify itself in the power business in Cambodia because our idea is that there are a lot of opportunities and power demand in the whole of Indochina,” said Mr. Chong. “So we want to make Cambodia being our hub to manufacture power products. So in Cambodia, we eye to export to Vietnam, networking to other neighboring countries.”

The higher level strategy comes after the firm has almost completed constructing a substation in Kratie and transmission line connecting the province through Kampong Cham province with Phnom Penh and will hand over the project to the Cambodian government no later than the end of this year.

The Pestech subsidiary PLC, which Mr. Chong said jointly invested with local company Diamond Group to found new company Diamond Power Limited (DPL), was granted a 25-year Build-Operate-Transfer concession in 2015 to construct the substation and the transmission line. The USD92 million-power transmission project was scheduled to be completed before the end of 2017.

About 95 to 98 percent of the project construction has been done, and was expected to be handed over to EDC one month earlier, according to Mr. Chong.

“The project in Kratie province was planned to be completed in 24 months, according to our contract. We should be handing over the substation and transmission line by this November, based on our schedule. We’re targeting commission by 25 October based on the progress at the site, so it is one month ahead of the schedule because the power plant site – Lower Sesan II Hydro Power Plant – will be commissioned in December this year. So the timing is so nice – we get the substation and transmission line in place already, waiting for them to commission and the power can start flowing and transmitting,” said Mr. Chong.

Based on data in Cambodia’s Power Development Plan, Mr. Chong said upon its completion, Cambodia would have another 400 megawatts of power capacity connecting to its capital, and it would help the country to reduce its reliance on importing power from neighboring countries.

“This project is very important because the power plant is going to generate 400 megawatts to increase the current power capacity of 2,200 megawatts generated by EDC to 2,600 megawatts. That means the EDC doesn’t need to rely on neighbouring countries to import energy. As I know from the statistics now, EDC is importing close to 1,700 megawatts from Vietnam, 580 megawatts from Thailand, and about 10 megawatts from Lao. The Lower Sesan II Hydro Power Plant alone is generating 400 megawatts. So the country can almost stop importing power from Thailand,” said Mr. Chong.

As the current project is almost completed, Mr. Chong revealed his company is in talks with the Cambodian government to seek new BOT agreements with power agency EDC and build other substations and transmission lines connecting with other provinces.

Pestech does not solely invest in power infrastructural construction, but it has turned to diversification in the power business in Cambodia after it was encouraged by the Cambodian government in recent years.

“Another plan is to set up a factory to assemble power transformers. We have been encouraged by EDC to build this factory to contribute to society. Because there are so many opportunities for industry in Cambodia, the EDC encourages us to do this to build manufacturing skills related to transformers. So I mean, for them, it is so good, promoting the industry in power sector,” said Mr. Chong.

Cambodia was expected to expand its source of power, and a lot of investment in substations and transmission lines are still needed to meet its goals as stated in Power Development Plan 2008-2021.

Currently, only 22.47 percent of Cambodian households are connected with electricity in the country, and over 50 percent of electricity consumers are in urban areas. The government was expected to provide electricity to all villages across the country by 2020 and 70 percent of all rural households by 2030.

• Business and Market