A Phnom Penh Water Supply Authority (PPWSA) solar farm, as seen in September. Hong Menea
Last year’s removal of tariffs from solar panels produced in several regional nations, including Cambodia, has led to an increase in foreign investment in the sector. Many companies, the majority of them Chinese, have established facilities in the Kingdom to manufacture solar cells and modules.
During a March 7 meeting with Prime Minister Hun Sen, Liu Minglin, president and vice-chairman of the board of directors of Chinese-owned Yunnan Investment Group – which is also building the Siem Reap Angkor Airport – confirmed his company’s intention to invest in the solar sector in Siem Reap.
Heng Kunleang, director-general for Energy at the Ministry of Mines and Energy, noted that the government encouraged the manufacture of solar panels for domestic use, as well as for export.
“Cambodia, like the rest of the world, is working to mitigate the effects of climate change and maximise the use of renewable energy. Therefore, the ministry also encourages and supports the production of solar panels for domestic use,” he said.
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng said the lifting of the US tariffs on solar equipment from four Southeast Asian countries – Cambodia, Malaysia, Thailand and Vietnam – has led to significant investment.
“As part of an ongoing trade war, the US actually raised tariffs on many items manufactured in China. One solution to this problem for many Chinese companies was to establish factories her in Cambodia,” he added.
“In addition, the Cambodian government recently announced its electric vehicle [EV] policy, which provides additional incentives for investment in the electronics industry,” he said.
Hong Vanak, director of international economics at the Royal Academy of Cambodia, said the tariff exemptions definitely highlighted the potential for Cambodia to be used as a base for exports to the US.
“It has provided an excellent opportunity for Cambodia to expand production off these specific items. The investment environment and the ease of doing business in Cambodia are already big positives for investors.
“As long as there is a global market for solar energy, we will see the sector continue to grow. In the past, the US granted favourable tariff conditions for bags and travel goods that were made here, and those sectors saw significant growth,” he added.
In June last year, amid disruptions to energy markets fuelled by the Russia-Ukraine war, US President Joe Biden issued a proclamation authorising the temporary suspension of import duties on solar cells and modules from the aforementioned nations.
According to the Cambodian General Department of Customs and Excise (GDCE), in 2021, the Kingdom exported a total of 54,319.83 tonnes of solar panels worth $273.87 million, an increase of more than 27 per cent on the previous year in terms of tonnage.
