Spreading the Benefits of Growth throughout Cambodia
Over the last 25 years Cambodia has grown from one of the poorest countries in the world to a lower middle-income country, but this growth is concentrated around the major cities. Now Cambodia is working to extend basic services like clean water and reliable electricity out of the cities, so that all Cambodians can share the benefits of growth.
The expansion of basic services will make everyday life easier for Cambodians who live outside urban areas, and access to clean water will substantially improve their health. Affordable electricity means small workshops and factories can operate for longer hours, food can be refrigerated, and school children can study at night.
Over the last 20 years Cambodia has averaged annual economic growth of over 7 percent, and this has transformed the country. New jobs are proliferating in the construction, garment and tourism sectors, but these opportunities have yet to spread to rural areas where agriculture is still a major source of income.
The Royal Government of Cambodia has licenced 360 private electricity companies, connecting 1.8 million homes to the electricity grid. Almost 140 private operate networks which provide piped treated water to peoples’ homes.
But commercial suppliers of water and electricity are reluctant to expand into areas where it takes longer to earn back the initial investment. Coupled with relatively low public expenditure on infrastructure assets and maintenance, large parts of Cambodia remain without basic utility infrastructure.
Our research indicates that another 50 to 100 drinking water companies could be encouraged to expand their coverage with some additional capital. This could benefit more than 100 000 households or 500 000 Cambodians.
Investing in Infrastructure also estimates that subsidies could help up to 70 electricity companies to expand their networks or make it more affordable for poorer households to connect to the national electricity grid.
We’re also exploring ways to encourage financial institutions to invest in basic infrastructure. We have found there is significant interest in investing in large scale solar energy projects, under the right conditions. In later years we may expand our activities to other infrastructure related sectors.