The Asian Development Bank (ADB) approved $82.5 million for the second phase of Cambodia’s Energy Transition Sector Development Program to help the country switch to cleaner energy, the organization announced. The program gets additional funding from the ASEAN Infrastructure Fund, Green Climate Fund (GCF), and the UK through various climate finance facilities. Cambodia wants to reach 70% renewable energy in its power mix by 2030. The money will combine policy changes with investments in new technology. This second phase builds on reforms started in 2022 that began pushing the energy sector toward renewable sources.
Cambodia relies heavily on imported fossil fuels and faces growing electricity demand as its economy develops. The country has been working to reduce energy costs and improve access to power for businesses and households. Air conditioners use the most electricity in homes, so the program will introduce the first energy efficiency standards for these appliances. Many small businesses want to invest in energy-saving equipment but struggle to get loans from banks. The program aims to make it easier for local companies to access financing for clean technology upgrades.
The second phase will create an Energy Efficiency Revolving Fund that helps small and medium businesses get loans for energy-saving investments. Local banks will be able to lend money to companies that want to buy efficient equipment or upgrade their operations. ADB’s Anthony Gill said the program “will support turning the government’s ambitious vision into reality” and help ensure “Cambodia’s growth remains both sustainable and affordable.” The revolving fund structure means the money gets reused as loans are paid back, creating a sustainable financing system for energy efficiency projects.
A third phase is planned for 2027 that will expand the regulatory framework and introduce technical standards for renewable energy, buildings, and industry. The goal is to attract more private investment by creating clear rules and standards that companies can follow. Cambodia’s energy transition program shows how development banks are combining policy reforms with financial support to help countries meet climate goals while boosting economic growth.
