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Street light replacement - CAMBODIA

Country Background

Cambodia currently relies on nearly 100% imported oil fuel from overseas to generate the
countrys energy needs. With the on-going increase in oil prices, renewable energy has been
given more attention in the world. Already some countries such as Brazil have been using
bio-energy and solar as a main energy supply and more countries particularly those which
are land rich have been adopting bio-energy and alternative power sources.

Following the leads of several regional governments, the Government of Cambodia
recognising their countrys oil dependency and indeed risks on importing nearly 100% of its
oil for energy use is now focusing on alternative sources of energy and have now developed
their own alternative Energy Development program by encouraging the greater investment
and development of alternative fuels.

Domestic Supply
Imported Supply
Table Supply of Primary Energy in Cambodia (2005, million ton COE)

Oil Products



In line with policies to enhance a more environmentally aware economy and sustainable
economy The Government of Cambodia are focusing on ways to reduce their consumption
of fossil fuels and better manage associated high import costs.


One Asia Group Pte Ltd
Registration 201220295E

The Economic Institute of Cambodia (EIC) has researched and released a paper Renewable
Energy Development in Cambodia: Status, Prospects and Policies

The report highlights the drive the Government are spearheading and also the array of
options that are under consideration and or development.


As a project within the drive to develop a more sustainable economy the Cambodian
Government are focusing on a new project to replace all street lights with LED lighting
throughout all of the Countrys major cities.

Replacement Highlights

Replacement at no cost to the local host government.
On going operation and maintenance O &M of the installations to be managed by the
project steering committee.
All " savings " between current cost of city lighting and prevailing cost savings post LED
installation are to be shared between the parties.
The tenor of the project will be for 20 years
Break even for the provider of the hardware and installers within the first year of operation
(post installation).


LED light emitting diode streetlight solutions are maturing and several city governments
around the world have proven from early pilot projects, LED lights have been proven to be
energy-efficient, environmentally friendly and long lasting, an equally compelling factor is
that LED streetlight prices have dropped to similar levels as conventional bulbs.

Key Benefits of LED

Lower hardware costs
Quicker, easier and inherently safe to install, reducing installation costs by up to 50%
Low cost lighting control modules easy to install and retrofit
Leading energy efficiency (60%) and durability
Scalable, reconfigurable, future proof

With the fundamental changes and improvements in technology within the LED lighting
sector, it is clear that LED applications are set to only become more attractive for all
downstream market participants and end-users and will set to become the dominant source
of lighting during this decade.

Relevant Data

The city of Phnom Penh currently has 10,000 street lights that incur an annual bill of
15 million US$ or 1.33$ million per month.

With estimated outlay and initial costs of US$ 12 million ( Twelve million), we expect
repayment of the initial sunk costs to be made within 15 months of operation and the
prevailing on going yield against investment of 3.15% per month. Within this total we


One Asia Group Pte Ltd
Registration 201220295E

assume the sum of the supply costs and the sum of mechanical supplies and labour
(installation and initial maintenance of existing infrastructure(s)

Scope of Investment
The Cambodian Government has commissioned this project to promote national identity
and to make the city more attractive to tourists and to also develop much needed cost
savings to the annual operating bill of the major cities.

Within the Capital City, the ultimate provider is expected to leverage its lighting expertise to
illuminate and showcase through Hybrid LED and Solar Street Lighting around twenty
major buildings including; the Central Market, the Independence Monument, the Royal
Palace, the parliament building, the citys administrative buildings, the central post office,
and the Monivong and Japanese bridges.

Within the Capital City project the renovation and extension work, involving some 10,000
lights, should be completed within one year and call for investment in the order of $8 million
US$ ( Eight million US$ ). This investment will be quickly recouped in part through energy
savings and reduced operating costs, allowing the City to carry out the upgrading work

The ultimate scale of the total replacement exercise ( 5 major Cambodian Cities ) suggests
that the creation of factory facilities set up within Special Economic Zones developed by the
government will optimize distribution and also create local employment. Clearly any
developed production facility would facilitate smooth distribution, save export costs and
time and potentially and potentially develop the ability to grow to export level efficiency.
The producer will benefit from tax incentives on production as well as upon the free
transferring of profits or dividends ( cost savings ) to a designated home Country Account.
Ultimate production facilities capital investment ( as elected by the supplier ) is estimated
between 3-4 US$ Million including all appropriate infrastructure, installation and licensing.

We estimate that up to 30 jobs can be created giving Cambodian workers who possess
expert know-how and innovation making cities more attractive the opportunity to
contribute to economic growth and progress throughout the Country.

Project Data :

Phnom Penh: 1.5 million inhabitants
Total installation Lights: 10,000
Pole height: 12 meters
Spacing between poles: 35 meters
Current lamps (bulbs):250W which will equate to 120W in LED fit out
Services: provision of lighting displays, operations & maintenance, renovation and expansion
of urban lighting systems and implementation of energy efficient technologies
Project length: 20 years
Projected Market value: $60 million
Projected total Investment: $5million - Within this total we assume the sum of the supply
costs and the sum of mechanical supplies, labour (installation and initial maintenance of
existing infrastructure(s) and creation of any future factory facility).


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Registration 201220295E

Incentives to The Producer ( Installer)
No import duties or capital gains tax.
Government encouragement for the manufacturer to set up a production facility in the
Country. ( tax breaks , licensing and distribution ).
On going 20 years of revenue share derived from subsequent cost savings achieved through
The supplier would be well publicized for work in an emerging economy.
Cities would also become innovators in their own right, which will be in itself another
fantastic way to publicize involvement of the supplier.
This is an immediate proposal offering no capital outlay for the project, both sides achieve
positive revenue through cost savings as well as environmental benefits for the Country.

Role of The Project sponsor

To obtain all approvals and licensing for the replacement exercise within the Kingdom of
To manage all logistics both for initial imports and distribution of product.
To locate land, machinery and staff for development of approved factory investment for
the production of LED bulbs.
To manage all operation and on going management of the replacement exercise.

For the purpose of clarity attached below is a flow chart of proposed structure:

Operation deadline : Before 15 December 2014

Steps : After signing the LOI (letter of intent) and acknowledgment of funding ability The
supplier Company will meet with the Cambodian Elecitricitie du Cambodge EDC and the
Ministry of ENERGY and in doing so verify the project and also visit current power
production facilities to determine specific specifications and to examine exact supply
quantity of both fixtures and necessary where needed poles. Following this will be
agreement to the final supply contract agreed with the project owner.

We urge your attention to this proposal and submission of an LOI , financing confirmation
and accompanied track record within the LED sector at the earliest juncture.
We look forward to working with you.


One Asia Group Pte Ltd
Registration 201220295E