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Reconciling energy transition and economic development in Cambodia: the 2050 Facility mobilized
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In order to meet the objectives it has set itself under the Paris Agreement, Cambodia wishes to develop a sustainable energy development trajectory, while meeting growing demand. To support it, a Memorandum of Understanding (MoU) was signed on July 24 with the Ministry of Economy and Finance, formalizing support of 300,000 euros from the 2050 Facility.
The Cambodian economy, mainly driven by the industrial sector, is growing rapidly. While biomass remains the country's main primary source of energy, the demand for electricity is booming: analyses forecast an average increase of 15%/year until 2040.
The challenges are therefore numerous in order to ensure affordable access to electricity for all, long-term energy security and independence, while respecting the Paris Agreement.
AFD, through the 2050 Facility (created in the wake of the 2017 One Planet Summit), signed on 24 July 2020 an MoU with the Policy Department of the Ministry of Economy and Finance, which hosts an inter-ministerial working group on the energy sector.
The objectives of the project are to:
- Define a long-term energy sector trajectory in line with the long-term objective of the Paris Agreement on the basis of scenarios for the evolution of the sector and its impact on economic growth;
- Define a strategy for the energy sector to support the country's growth and contribute to future national energy sector policies;
- Build the capacity of ministerial staff in macroeconomic and energy modeling and analysis.
This support will materialize in two phases; on the one hand through the creation of a technico-economic model of the energy sector in Cambodia to be used as an input and on the other hand through a multi-sectoral macroeconomic model to define the impacts of energy sector assumptions on the Cambodian economy (GDP, employment, pollution, ...).