Ex-Ante Evaluation
Southeast Asia Division 2, Southeast Asia and Pacific Department
Japan International Cooperation Agency
1. Name of the ProjectCountry: Kingdom of Cambodia
Project: Phnom Penh City Transmission and Distribution System Expansion Project(Phase 2) (II) / Project for Enhancement of Operation and Management ofCambodian Transmission System
Loan Agreement: May 28, 2018
2. Background and Necessity of the Project(1) Current State and Issues of the Power Sector in Cambodia and the Priority of theProject
The Kingdom of Cambodia (hereinafter referred to as “Cambodia”) has maintaineda high real GDP growth rate of around 7% per year on average for the last 10 years.
This economic growth has been driven by the export-oriented sewing industry andservice industries including sewing industry. Moreover, Cambodia has been a
promising candidate for Thailand- or China-plus-one strategies since 2010, attracting
automobile parts industry and other manufacturing industries. With this strong growth,
power demand has also been rising rapidly, especially in the capital city of Phnom
Penh, which is densely populated and heavily industrialized. Both peak power
demand and power generation grew at a robust rate of more than 20% per year on
average during the years between 2003 and 2016. Although power generation
capacity has increased with the construction of large power plants, the limited
transmission and distribution capacity has caused a bottleneck in power supply inPhnom Penh. In addition, the underdeveloped power control system makes it more
likely that an accident will result in an extensive and prolonged power outage.
In response to these urgent problems, the Phnom Penh City Transmission andDistribution System Expansion Project (ODA Loan) was launched to build andexpand substations and install transmission and distribution lines and communication
cables to create a transmission loop system in central Phnom Penh. Now, the PhnomPenh City Transmission and Distribution System Expansion Project (Phase II) (ODALoan; hereinafter referred to as “the Project”) is being implemented to introduce thecountry’s highest-ever voltage of 230 kV in the transmission loop system in central
Phnom Penh to allow power supply at a higher voltage as well as further construct
and expand substations and distribution networks to ensure stable power supply in alarger area.
(2) Japan and JICA’s Policy for the Power Sector and the Priority of the Project
The Government of Japan has identified the “Industrial Development” as a priority
area in its Country Development Cooperation Policy for Cambodia (July 2017),
whose Annex, Rolling Plan, suggests support to “promote the electricity supplysystem which is an important factor in attracting Foreign Direct Investment.” JICA’s
Country Analysis Paper for Cambodia (March 2014) also indicates that since power
generation development is promoted mainly by independent power producers(hereinafter referred to as “IPPs”), JICA should keep focus on expanding powertransmission and distribution networks and strengthening operation and maintenancecapacity to improve the stability of power supply especially in the capital city where
power demand is increasing. The Project is consistent with the above-mentioned
policies and analysis. Moreover, the Project’s efforts to construct and expand
substations and transmission and distribution networks to improve the stability ofpower supply in the capital city of Phnom Penh are expected to contribute to Goal 7of the Sustainable Development Goals (ensure access to affordable, reliable,sustainable and modern energy for all).
(3) Other Donors’ Activities
In the power sector in Cambodia, the World Bank supported rural electrification
through the Rural Electrification Fund (hereinafter referred to as “REF”) in 2004. This
support was completed in 2012, and now the REF continues to function as adepartment of Electricité du Cambodge (hereinafter referred to as “EDC”). The AsianDevelopment Bank (hereinafter referred to as “ADB”) has implemented a projectsince 2012 to install 2,110 km of 22 kV distribution lines in rural areas as well as
strengthen the institutional capacity of EDC mainly in key operational areas including
strategic corporate management, financial management / investment planning, andhuman resource management. Meanwhile, the Export-Import Bank of China isplanning to finance the extension of transmission lines in rural areas.
3. Project Description(1) Project Objective
The objective of the Project is to enhance the stability of electrical supply in Phnom
Penh, by providing new substations, transmission lines, distribution lines and related
facilities, and augmenting the existing substations, thereby contributing to sustainableeconomic growth in Cambodia.
(2) Project Site / Target Area
Phnom Penh
(3) Project Components
1) ODA Loan Projecti) Substations (construction of two new substations and expansion of twoexisting substations)ii) Transmission and distribution system expansion (expansion of 230 kV
overhead and 230 kV underground transmission lines and 22 kV distributionlines)iii) Consulting services (basic design, detailed design, tender assistance,construction supervision, etc.)
2) Technical Cooperation Project related to ODA Loani) Inputs
A) Japanese Side● Experts (short-term experts; 98M/M)• Chief Advisor / Power System Planning (Facilities Planning)• Transmission and Substation Facilities Operation• Power System Planning (Power System Simulation for Engineering(PSS/E) and Institute of Electrical Science (IES))• Power System Operation (PSS/E, National Control Center Operation Plan,Restoration)• Relay Setting• Transmission Line Facilities (Maintenance, Restoration, IES)
• Substation Facilities (Maintenance, IES / Procurement)• Organisation Development• Organisation Development / Coordinator● Provision of substation training equipment (transformers, transformationsystems, etc.)● Counterpart training in Japan and / or Third Countries (Power System
Planning, Operation, Maintenance, etc.)● Local operation costB) Cambodian Side
● Counterpart personnel• Project Director: EDC Deputy Managing Director (Planning andTechnique)• Project Manager: EDC Director of Corporate Planning & ProjectsDepartment• Project Co-manager: EDC Director of Transmission Department• Project Co-manager: Director of IES• Other counterpart personnel: Technical staff in charge of CambodianTransmission System planning and operation from Corporate Planning &Projects Department, Transmission Department, Generation Department,
Business & Distribution Department and trainers of IES● Provision of office for JICA experts● Preparation of necessary equipment● Operation costii) Project Purpose / Indicators
The Cambodian Transmission System is properly and effectively planned,
operated, and managed by EDCIndicator 1. Power system plan is adequately updated and revised based onpower system analysis.
Indicator 2. Power system plan is harmonized with facilities designing andconstruction in order to make facilities and equipment to be newly
constructed, replaced, and/or expanded function in CTS in a well-coordinated manner.
Indicator 3. Power system operation plan is adequately updated and revised
based on results of power system analysis.
Indicator 4. The number of failures and defects found on EDC-owned facilities isreduced at post completion inspection and/or after handover to theTransmission Department. (necessary to set baseline and targetvalue)
Indicator 5. Time duration in drills of early restoration from power outage isreduced to XX from the time at the first exercise. (necessary to setbaseline and target value)iii) Outputs
Output 1. Organisation capacity on managing CTS is strengthened.
Output 2. Training systems on CTS are enhanced
Output 3. Staff‘s capacity is improved on power system network planning,operation, and maintenance.
Output 4. Staff’s capacity for early restoration from power outage is improved.
iv) Beneficiaries (Target Group)
Direct beneficiaries: Engineering staff from the EDC Corporate Planning &Project and Transmission Departments and IES Lecturers
Indirect beneficiaries: All people living in Cambodia (Population: 14.7 million)(4) Estimated Project Cost
Yen Loan Amount: 27,003 million yen (Yen Loan Amount for the Project: 9,216
million yen)
(5) Project Schedule
ODA Loan Project: March 2015 (L/A signed for the Project (I)) to May 2022 (total87 months). The Project will be deemed complete when the service starts (planned inJune 2021).
(6) Project Implementation Structure1) Borrower: The Royal Government of Cambodia
2) Executing Agency: Electricité du Cambodge (EDC)
3) Operation and Maintenance Agency: EDC(7) Collaboration and Division of Roles with Other Projects and Donors
1) Japan’s Assistance Activities
JICA has assisted in strengthening the operation and maintenance oftransmission and substation facilities and EDC’s system operation capacity throughthe Project for Improvement of Transmission System Operation and Maintenance(Technical Cooperation; from 2013 to 2015) and the Project for Enhancement ofOperation and Management of Cambodian Transmission System (TechnicalCooperation Project related to ODA Loan; from 2017 to 2021). The outcomes ofthese projects are expected to facilitate the proper operation and maintenance ofthe facilities being developed in the Project.
2) Other Donors’ Assistance Activities

None in particular(8) Environmental and Social Consideration / Poverty Reduction / Social
Development
1) Environmental and Social Considerationi) Category Bii) Reason for Categorization: The Project is not located in a sensitive area, nor
has sensitive characteristics, nor falls into sensitive sectors under the JICA
Guidelines for Environmental and Social Considerations (April 2010), and its
potential adverse impact on the environment are not likely to be significant.
iii) Environmental Permit: The Initial Environmental and Social Impact
Assessment (hereinafter referred to as “IESIA”) report for the Project wasapproved by the Ministry of Environment on January 6, 2016.
iv) Anti-Pollution Measures: During construction, the contractors will take air andnoise pollution measures, such as sprinkling water to prevent dust and using
low-noise equipment and construction methods, to minimize the adverse
impact on the environment.
v) Natural Environment: The Project is likely to have a minimal adverse impact
on the natural environment since the Project site is not located in sensitive
areas or their vicinity, such as national parks.
vi) Social Environment: The Project needs to acquire 4.6 ha of land and causes
involuntary resettlement of three households (15 persons). The land of 4.4 hafor expanded substations has been already acquired. As for the acquisition of
the remaining 0.2 ha for steel poles for 230 kV overhead transmission lines
and the involuntary resettlement of three households living within the Right ofWay, the Resettlement Action Plan (hereinafter referred to as “RAP”) will be
modified based on detailed design results and then implemented inaccordance with the JICA Guidelines and Cambodian laws and regulations.
vii) Other / Monitoring: In the Project, the contractors will monitor air quality andnoise levels under the supervision of EDC during construction, and EDC will
monitor safety management and soil and water quality after handover. EDC
will also monitor the land acquisition and involuntary resettlement processes.
2) Cross-Cutting Issuesi) Climate Change-related Projects: The Project is expected to contribute toclimate change mitigation (Estimated CO2 emissions reduction from theProject as a whole: 6,846 tons per year)ii) Poverty Reduction and Considerations: None in particulariii) Measures for Infectious Diseases Including HIV/AIDS: The executing agency
will require the construction contractors to take HIV/AIDS prevention
measures for construction workers and local residents.
iv) Participatory Development: None in particularv) Consideration for the Handicapped, etc.: None in particular3) Gender Classification: Not applicableActivities / Reason for Classification: The Project is not subject because it isunlikely to include specific actions that can contribute to gender equality.
(9) Other Important IssuesNone in particular
4. Targeted Outcomes(1) Quantitative Effects
1) Outcome (Operation and Effect Indicators)
Target (2023)[Expected value 2years after projectcompletion]

Indicator

Facility

Baseline

Transformer
availability
factor (%)
Electricity
supply(MWh year)
Outage times ofsubstation(times/year)*

National Control Center-98

Toul Kork Substation-99

National Control Center-

89,104

Toul Kork Substation-90,119

GS5 Substation-0

National Control Center-0* This does not include outages attributable to natural and man-made disasters.
(2) Qualitative Effects
Stabilization of domestic power supply, promotion of investments, revitalization ofthe industry, etc.
(3) Internal Rate of Return
Based on the conditions indicated below, the Economic Rate of Return (EIRR) of
the Project is estimated at 15.4%, and the Financial Rate of Return (FIRR) is
estimated at 11.1%.
[EIRR]
Cost: Project costs and operation and maintenance expenses (both excludingtax; including the increased cost of purchasing electricity by IPP to cover theincreased electricity sales volume)
Benefit: Reduction in the cost assuming that private electricity suppliers provide
the increased electricity sales volume
Project Life: 30 years[FIRR]
Cost: Project costs and operation and maintenance expenses (including theincreased cost of purchasing electricity by IPP to cover the increased electricity

sales volume)
Benefit: Increased electricity sale income from the increased electricity sales
volumeProject Life: 30 years
5. Prerequisites and External Factors(1) Prerequisites
None in particular(2) External Factors
None in particular
6. Lessons Learned from Past Projects
The ex-post evaluation of the Power Distribution Reinforcement Project in Thailand(evaluated in 2009) suggests that because the increasing sophistication ofdistribution system operations necessitates continuous human resource development,
it is desirable to further promote employee skill development with an eye towards theautomation of the distribution system in order to ensure the effective use of theinfrastructure developed by the project.
The Project also needs to strengthen the capacity of EDC staff responsible formaintenance in the Transmission and Business & Distribution Departments.
Therefore, the Project for Improvement of Transmission System Operation andMaintenance (Technical Cooperation) was implemented from 2013 to 2015 toenhance EDC’s capacity to operate and maintain transmission and substation
facilities, develop maintenance standards, and perform inspection operations as well
as develop trainer certificate standards, train trainers, and transfer techniques. Thiswas followed by another project, the Project for Enhancement of Operation andManagement of Cambodian Transmission System (Technical Cooperation Project
related to ODA Loan; from 2017 to 2021), which aims to develop a system that will
enable EDC to work autonomously on operational improvements by reviewing anddiscussing standards and strengthening internal training systems. Thus, support isbeing extended to enhance EDC’s system operation capacity in order to further
strengthen the transmission and distribution facilities being developed in the Project.
7. Evaluation Results
The Project, aimed at improving the stability of power supply in the densely
populated and heavily industrialized capital city of Phnom Penh, is deemed toconform to the development issues and policies of Cambodia and the assistancepolicies and analysis of Japan and JICA as well as contribute to Goal 7 of theSustainable Development Goals. In addition, the Project is expected to underpin thebusiness activities of Japanese firms in the Cambodian market. Therefore, it is highly
necessary to support the implementation of the Project.

8. Plan for Future Evaluation(1) Indicators to be Used
Per 4. (1) – (3)(2) Timing
Ex-post evaluation: 2 years after project completion (The ODA loan project and thetechnical cooperation project related to ODA loan will be evaluated integrally)