May Kunmakara | Publication date 07 August 2022 | 20:07 ICT

The US’ tariff exemptions on solar cell and module imports from Cambodia have led to a series of proposals for solar panel factories in the Kingdom in recent months, which prominent business players have lauded as a springboard to diversify renewable energy exports.

On August 5, the Council for the Development of Cambodia (CDC) revealed that it had decided to issue a final registration certificate to Solar Long PV-Tech (Cambodia) Co Ltd for a $12 million solar panel manufacturing and assembly plant in the Royal Group Phnom Penh Special Economic Zone – southwest of the capital’s airport – that is expected to create about 500 jobs.

The Ministry of Commerce’s business registry lists an address in northern Suzhou city of China’s Jiangsu province for the Solar Long PV-Tech Cambodia chairman, whose name is given as “Tang Yongming”.

The approval follows US President Joe Biden’s June announcement on tariff exemptions on solar cell and module imports from Cambodia, Malaysia, Thailand and Vietnam. The tax exemption is aimed at ensuring that the US has access to sufficient supply of solar cells and modules to meet electricity demand as energy demand continues to grow.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng praised the inflow of green energy investment into the Kingdom, which he said comes in response to demand on foreign markets such as the US’, and is in line with the government’s policy to promote clean energy use.

He stressed that the clean energy-related project “not only aims to promote the use of renewable energy, but is tied to the global necessity for everyone to be attentive to and protect the environment”.

“Since the onset of the Sino-US trade disputes, Cambodia has brought in a lot of investment in these solar cell plants, both for domestic use and for export to the US. The crucial thing is that now Cambodia receives tariff exemptions from the US – we are better positioned to attract investment from the Chinese for the production of solar cells for export to the US,” Heng said.

Similarly on July 18, the CDC announced that it would issue a final registration certificate for L-Q New Energy Co Ltd’s application to build an $84.5 million solar panel factory in UBE Snoul Special Economic Zone in Trapaing Sre village, Pi Thnou commune, Snuol district, Kratie province, which is anticipated to create some 1,000 new jobs.

According to the commerce ministry, L-Q New Energy was incorporated on January 19, with investors from neighbouring Jiangsu and Shandong provinces in eastern China. The business registry identifies the company’s chairman as “Zhang Luze”.

In a previous interview, commerce ministry secretary of state Seang Thay told The Post that the tax breaks for the production of solar cells and modules is another chance for Cambodia to expand into the area of manufacturing.

This, he said, is because Cambodia’s investment environment and the ease of doing business is good, thanks to the new Law on Investment.

“As long as there is a good market, investors will expand their production. In the past, the US provided exemptions on bags and travel goods, which has led to significant growth in production in this sector in Cambodia,” Thay said.

Last year, the Kingdom exported 54,319.83 tonnes of solar panels valued at $273.87 million, an increase of more than 27 per cent in terms of tonnage compared to 2020. A large chunk of the exports, around 53,188.19 tonnes or $256.88 million, was to the US alone, according to a report by the General Department of Customs and Excise of Cambodia.

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