Chinese money accounts for the overwhelming majority of investment in Cambodia’s anaemic energy sector, but while the government has been happy to take Beijing’s loans for the construction of hydroelectric plants, a study published last month found that such investment came with both ecological and economic consequences.

Taking as a case study the Chinese-built Kamchay hydropower dam in Kampot province, the paper – written by Amsterdam Free University’s Heng Pheakdey – examines the roots and consequences of China’s interest in Cambodia’s underdeveloped electricity generation facilities.

Two-thirds of Cambodia is currently without reliable access to electricity, according to Pheakdey, and a 2009 Ministry of Industry, Mines and Energy publication on the future of Cambodian energy production maps out a plan to remedy the shortfall through investment in hydroelectricity, with hydroelectric slated to account for half of all energy output by 2020.

The ministry told Pheakdey that Chinese firms have invested more than $1.6 billion in Cambodian energy projects. But the problem, according to Pheakdey, is that many Chinese dams fail to meet international standards, with social and environmental damage often resulting.

“While the economic gains from the dam have not yet materialized, local communities have seen their income reduced and their livelihood disrupted,” the paper reads.

Economically, the study found women suffered disproportionately to men thanks to sources of bamboo – the sale of which many relied on for their income – becoming more dangerous to reach. Workers on the dam also reported being paid wages insufficient to feed their families.

Ecologically, the water quality in the estuary from the dam to nearby Kampot town worsened considerably, and environmentalists warn that the project will result in a “notable loss of forest biodiversity and wildlife habitat”, Pheakdey found.

China, meanwhile, is “indifferent” to whether the projects are profitable, Pheakdey says, but pursues them because it “finds Cambodia’s strategic geographical location vitally significant to increase its influence in the region”.

Tracy Farrell, of environmental NGO Conservation International (CI), said that while she wasn’t familiar with the Kamchay case specifically, a recurring theme of Cambodian hydropower projects is a lack of prior investigation into potential social and environmental fallout.

“It’s not enough to do a localised environmental impact assessment; there needs to be wider assessment of diverted waterways and impact downstream,” Farrell said. “Normally fisheries are a big issue. But also, if you’re diverting water, changes to natural flooding could impact rice production.”

Carl Thayer, an emeritus professor at the University of New South Wales, believes the Cambodian government accepts Chinese funding for projects because they provide political capital.

“It shores up the legitimacy of [Prime Minister] Hun Sen and the [ruling] Cambodian People’s Party,” Thayer said.

And while the Cambodian government appears happy to accept the Chinese investment, Chinese investors are happy to turn a blind eye to factors other donors might take issue with, he said. “China does not operate with the same concerns others do over corruption and transparency.”