Cheaper, Cleaner Power Key to Cambodia’s Garment Sector Growth
2025-10-04 15:00
Experts say cheaper electricity and a stronger clean energy push are vital for Cambodia’s garment sector to remain competitive, attract investment and meet global brands’ imminent net-zero targets
Cheaper electricity, coupled with a huge clean energy drive, would help strengthen Cambodia’s garment sector, making it more competitive within the region and attractive to investors, experts say.
Speaking during the panel discussion, ‘Electric by 2040: Electrifying Cambodia's Garment Sector’ at Clean Energy Week on October 3, Peter Ford, EnergyLab’s Energy Policy Lead Garment and Clean Energy Skills, said the majority of global brands have set firm targets of hitting net-zero by 2040.
“For net-zero to be achieved means all energy consumed by a factory has to be electricity or renewable electricity. So no more burning anything; no biomass,” he said, adding that many factories in Cambodia rely heavily on biomass - a contributor to deforestation - to fuel operations.
Ly Tek Heng, Executive Manager, said a major barrier in persuading factories to shift is the cost, pointing to Cambodia’s electricity tariffs - among the highest in the region.
“‘Why is Cambodia’s electricity such a high cost?’ This is a question I hear repeatedly. Compared to neighbouring countries, cost is an issue,” he said
Tek Heng added that currently, TAFTAC has about 900 factory members. “If electricity cost less, maybe we’d have 3,000 factories. Trying to get electricity cheaper, or finding the technology to do this, is important,” he noted.
“We are business people, investors are here to make money and everyone is trying to make a profit. Our responsibility is to make competitive products, and the cost of electricity is important. Making products from clean energy is our responsibility. Our factories and our reputation will make Cambodia competitive.”
Tek Heng said that Cambodian garment factories make goods for premium brands, with the ‘Made in Cambodia’ label featuring on many designer products. “We’re making goods for premium brands that can be seen in expensive shops,” he added.
“When people see ‘Made in Cambodia’, they may be surprised that our workers are making high-quality, end products for the global market. So, we must also take responsibility that these ‘Made in Cambodia’ products come from clean, green energy.”
Sovichea Saron, STAR Network Secretariat Head, said regionally the garment industry, especially in developing countries, faces many hurdles in fully electrifying operations, with financing the transition a major challenge.
“Renewable energy isn’t a short-term investment, you have to think about how to finance it. Then there’s the business uncertainty, which we’ve seen lately can change in an instance. There’s also policy uncertainty, which makes it very unpredictable for investors and adds to hesitation,” he stated.
“The industry is saying that renewable energy is important and buyers are demanding it. It’s no longer aspirational, we need to do it, and we want it. So, please make it easier.”