Robust economic growth over the last 15 years has significantly increased Cambodia’s energy needs, particularly the demand for electricity. At the same time, around half of the electricity supplied to the grid is still generated from coal. 

On 6 October 2025, the Asian Development Bank (ADB) approved the second phase of Cambodia’s Energy Transition Sector Development Program, advancing the country’s shift toward cleaner and more secure energy. Building on the foundations of subprogram 1—which introduced policy measures to accelerate the adoption of clean energy, and supported investments in energy storage and efficiency initiatives— the $82.5 million subprogram 2 will continue to support the country’s energy policy reforms while piloting demonstration projects that encourage private sector participation in the transition. 

A key feature is the establishment of an energy efficiency revolving fund to expand access to finance for small and medium-sized enterprises (SMEs), enabling wider uptake of cost-saving and low-carbon technologies. The ASEAN Catalytic Green Finance Facility (ACGF) has supported the program from its inception. For subprogram 1, ACGF mobilized $22 million in cofinancing from the Asean Infrastructure Fund (AIF) and the Green Climate Fund (GCF), while also providing technical assistance to strengthen implementation and prepare subprogram 2. For subprogram 2, ACGF is contributing $30 million in cofinancing from AIF, GCF, and the United Kingdom (UK), alongside dedicated technical assistance.

The program is expected to boost renewable electricity generation by 30% and cut electricity demand by 9% annually by 2029 (vs. 2023), while channeling $20 million through the revolving fund to SMEs—with at least 30% for women-owned or led enterprises—expected to result in annual savings of 280,000 tCO₂e over the next 15 years.