The Asian Development Bank ( ADB ) has approved a US$63.44 million financing package to rapidly integrate renewable energy, overhaul Cambodia’s power grid and boost cross-border power trade in an initiative, known as the Utility-Scale Battery Energy Storage project.

The financing package includes a US$40 million concessional loan and a US$5 million grant from the ADB through the Asian Development Fund, along with US$18.44 million in cofinancing from the Green Climate Fund and the UK through the Asean Catalytic Green Finance Facility.

At the heart of the project is the construction of a massive 250-megawatt/500-megawatt-hour battery energy storage system located at the Takeo substation in Cambodia.

Once operational, the facility will function as a large-scale power bank for the Southeast Asian country, capturing and storing excess renewable energy during low-demand periods and dispatching it back into the grid to manage peak loads and mitigate solar energy fluctuations.

This will help meet growing electricity demand, the ADB points out, from rapidly expanding industrial zones, agro-processing facilities and urban districts in southern Cambodia.

It will also drive cross-border electricity trade and grid interconnectivity with Vietnam, including Cambodia’s power imports, contributing to the Asean Power Grid’s goal to achieve fully integrated electricity grid operations across Southeast Asia by 2045.

Cambodia’s energy sector relies heavily on imported fuel for power generation. Despite significant progress in expanding generation capacity, access and transmission infrastructure, the kingdom remains exposed to external price volatility and supply disruptions caused by geopolitical tensions and other external shocks that threaten grid stability and sustainability.

The project supports Cambodia’s target to achieve 70% renewable energy capacity by 2030 enabling greater integration of solar and other renewables. Once operational, it is expected, according to the ADB, to avoid up to 27,700 tonnes of greenhouse gas emissions annually.

The project will strengthen the capacity of Electricité du Cambodge ( EDC ), which is Cambodia’s state-owned power utility, to manage advanced energy systems.

It will also support the development of battery energy storage regulations, the bank notes, and promote skills development, particularly for women, to increase female participation in the energy sector and in technical and leadership roles.

“Amid the global energy crisis, this project further reinforces Cambodia’s commitment toward clean energy transition,” states Yasmin Siddiqi, the ADB’s country director for Cambodia. “By strengthening the power grid with advanced battery storage, we are helping the country unlock more renewable energy, while ensuring that families, farmers and businesses benefit from safe, stable and affordable electricity.”