The industrial sector in the Kingdom of Cambodia has shown strong growth in the past decade resulting in a steady increase of its share in total GDP from about 23% in 2009 to 32% in 2016.8 The garment industry is the industrial sector’s largest employer.

The sector’s expansion is reflected in its growing energy demand, with total final consumption increasing by about 11% between 2010 and 2015.  The predominant use of unsustainable, non-traceable cheap fuelwood in the factories of Cambodian garment suppliers contributes to the country’s rapid forest depletion and further exacerbates the sector’s ecological footprint.

Cambodia’s garment industry is losing its edge compared to countries like Bangladesh, Myanmar, and Viet Nam, given its high energy costs as well as the recent increase in the monthly minimum wage, lagging infrastructure, productivity, and logistics. The cost of electricity from the national grid in Cambodia is the highest in ASEAN.

There is an opportunity for Cambodian factors to use sustainability as a competitive advantage. An increasing number of international brands, to which Cambodian factories are supplying garments, have set corporate targets to lower the environmental footprint of their supply chains. By improving sustainable energy practices in the sector, operation costs can be reduced and green production processes can improve competitiveness and reduce negative environmental externalities.

Activities of this project include:

• Identify appropriate and context-relevant regulatory measures and formulate recommendations for the government;
• Provide technical assistance to government agencies to adopt and operationalize recommended regulations;
• Provide technical assistance to relevant government agencies to develop appropriate mechanisms and facilitate the adoption of M&V procedures for energy management in industries;
• Build technical capacities of relevant participants through guidelines and tools to implement the procedures;
• Demonstrate the potential benefits of adopting more sustainable energy practices;
• Design a guarantee fund to encourage market players to participate in sustainable energy projects.

Impact: Increased competitiveness and decreased environmental impact through sustainable production in the Cambodian garment industry. 

Outcome: N/A 

Project Outputs completed in 2020: 

i. Green Growth Policies: N/A

ii. Green Investments: N/A

iii. Capacity Building and Knowledge Products: N/A

Project Manager: Bradley Abbott

Samedy Sut, Chantharo Khan, Putheary Kuy