Infrastructure Development

The development of public infrastructure ­– including transport, energy, water, communications and sanitation – plays a crucial role in stimulating resilient, inclusive and sustainable economic growth. To continue current levels of growth, Cambodia is estimated to require infrastructure investments of US$28–30 billion between 2016 and 2040.

Private sector investment can help bridge this gap and will become more important as Cambodia moves to upper middle-income status. The Royal Government of Cambodia is encouraging this through a strong regulatory framework (the 2021 Law on Investment and the 2021 Law on Public–Private Partnerships).

CAPRED focuses on strengthening the private sector’s role in piped water, variable renewable energy and energy efficiency investment. CAPRED will also explore other infrastructure financing, such as deal flow, public–private partnerships and green infrastructure bonds.

Our approach

Clean, affordable piped water

Piped, treated water is the gold standard for sustainable access to clean water. Immediate in-home access is especially beneficial for women, people living below the poverty line, and people with disability. While urban coverage is 70%, only 47% of the total population can access piped water (2020). An estimated investment of at least US$264 million is needed to cover the remaining villages.

Australia’s former infrastructure program, 3i: Investing in Infrastructure, implemented 80 viability gap financing investments for water projects in Cambodia. This supplied water to more than 253,000 households. Viability gap financing mobilised private sector investments of approximately US$16 million (or 55% of total investment costs).

Without viability gap financing, these households would not have access to clean, piped water. Monthly water consumption has since doubled from 5 to 12 cubic metres, particularly among households that previously accessed water through truck delivery.

CAPRED is working on other financing options such as the Water Development Fund. We are also helping the Royal Government of Cambodia on regulatory, monitoring and enforcement capacity; testing new business models; providing technical support to private water operators; and working to encourage more youth participation in the sector.

Variable renewable energy

Only 7.8% of Cambodia’s energy is variable renewable energy (VRE) – all photovoltaic solar. VRE is the future of energy supply. It is cleaner and cheaper than alternatives. Prices of solar and wind generation are now lower than even the cheapest coal projects.

High energy costs are one of the biggest barriers to Cambodia’s agro-processing competitiveness and exports. Allowing agro-processors to install more VRE would attract investment and drive employment and income generation along the agricultural value chain.

The VRE sector has become crowded with major investors and development partners. As such, CAPRED works closely with the Royal Government of Cambodia to identify strategic niche areas and targeted supported needed for the country to absorb more VRE.

CAPRED will support Cambodia’s capacity to manage more VRE in the energy mix and develop an investment-friendly regulatory framework. The program will support the Ministry of Mines and Energy, Electricity Authority of Cambodia and Electricite du Cambodge to explore modern technologies for VRE integration and support the revision of grid monitoring and control systems.

Energy efficiency

The Royal Government of Cambodia’s Power Development Plan estimates that up to 17% of the country’s increased energy demand will need to be met through energy-efficient measures. By 2030, the goal is to save 1,215 megawatts, or about one-third of current supply.

Other countries have markets for Energy Service Companies (ESCOs) that invest in energy efficiency for industrial facilities. ESCOs provide the investment capital, and the “energy dividend” pays back the loan. There is currently no ESCOs market in Cambodia.

CAPRED will pilot potential investment models between ESCOs and businesses, starting with agro-processing facilities, where energy costs are high.

Electric vehicles can also significantly reduce carbon emissions. While electric vehicle transition principally benefits those who are wealthy, CAPRED will monitor government policy and look for entry points for investment in electric transportation.

Latest resources

See our latest resources from across the CAPRED program.

View more

CAPRED: Highlights 2023-24

The Cambodia Australia Partnership for Resilient Economic Development (CAPRED) is Australia’s flagship economic development program in Cambodia. CAPRED’s goal is to help Cambodia achieve resilient, inclusive and sustainable economic growth. Australia through CAPRED works with stakeholders across the Royal Government of Cambodia (RGC), the private sector and development partners to achieve outcomes. In its second full year of implementation (1 July 2023-30 June 2024), CAPRED had significant successes across the cross-cutting themes (Policy Hub; Gender Equality, Disability and Social Inclusion (GEDSI); and Climate Resilience) and technical domains (Agriculture and Agro-Processing; Trade, Investment and Enterprise Development; and Infrastructure Development).

CAMBODIA GOVERNMENT-PRIVATE SECTOR FORUM (G-PSF)

This policy brief provides an overview of the Cambodian Government-Private Sector Forum (G-PSF), from its founding to the challenges and opportunities of the present day. It is the first in a planned series of policy briefs that delve into the G-PSF model. The G-PSF is a comprehensive public-private dialogue mechanism that comprises a plenary forum chaired by the Cambodian Prime Minister and technical working groups (WGs). Its primary function is to provide a platform through which government and industry can come together to discuss, debate and create solutions to regulatory or policy issues to promote economic growth.

CAPRED in Policy Support

Within a fast-moving international trade environment, Cambodia’s aspirations for growth, along with global shifts and trends, require a focus on constructive economic policies.

CAPRED: Highlights 2023-24

CAMBODIA GOVERNMENT-PRIVATE SECTOR FORUM (G-PSF)

CAPRED in Policy Support

Latest news & stories

Read our latest news & stories to find out more about CAPRED’s interventions.

View more
Trade, Investment and Enterprise Development

Australia Supports Cambodia’s Strategic Investment...

Agriculture and Agro-Processing

Australia Fosters Small Business Growth

Gender Equality, Disability and Social Inclusion

Australia supports Cambodian businesses to reduce...