Despite Cambodia’s success in expanding access to the grid, electricity tariffs are amongst the highest in the region and businesses in rural areas tend to pay up to twice more than in urban, grid-connected areas (from 0.14$ kW/h in the capital vs. up to 0.25$ kW/h charged by diesel-powered mini- grids). Expensive and unstable electricity access negatively impacts MSME’s operations by raising their operational costs and incurring financial losses caused by unpredictable power outages. Despite the potential return on investment for shifting to solar, MSMEs have limited access to capital, with 60 to 90% using informal channels. In light of growing investments in the agri-/fishery sector and forecasted expansion of economic activities, commercial diffusion of solar solutions for productive use can curb GHG emissions, whilst reducing MSME’s operational costs and improve their competitiveness.
The project promotes production patterns in the Cambodian agri-fishery sector with a focus on agro-processing by encouraging micro-, small, and medium-sized enterprises (MSMEs) to adopt solar solutions; and fostering replication through demonstration and access to finance. Awareness raising on sustainable production is also promoted, policy dialogues organised, line ministries will be involved in demonstrations on sustainable production practices, and interactions between MSMEs and financial intermediaries will be supported.
Switch to Solar main objective is to contribute to sustainable and inclusive economic growth in rural areas of Cambodia by reducing the environmental impacts of MSMEs energy consumption and generating green employment opportunities. More specifically, the project aims to improve consumption patterns and behaviours in rural areas of Cambodia by supporting MSMEs to switch from unsustainable energy to solar energy sources.
The Way Forward
- Business models and technology solutions are designed, demonstrated and promoted to scale up agri/fishery MSMEs’ specific needs;
- Local solar technology providers/entrepreneurs strengthened their capacity and have expanded their operations to better reach MSMEs, and provide new technologies that bring added value to the agri/fisheries sector;
- Targeted MSMEs and consumers have improved awareness and access to a range of solar energy devices, financing options and customer services;
- Improved business environment for solar technology solutions and established synergies among main stakeholders.
Relation to European Green Deal, Circular Economy and Climate Change
The project is in line with EU Priorities and in particular the EU Green Deal by fostering the transformation to a modern, resource-efficient and competitive economy in Cambodia. In particular, the project aims to tackle climate and environmental-related challenges, which are global, by ensuring no net emissions of greenhouse gases and by promoting a sustainable and inclusive economic growth that is decoupled from resource use.