Cambodian Cabinet approves 2 hydroelectric dam projects to be built by Chinese companies

PHNOM PENH, Cambodia: The Cambodian Cabinet has approved plans for Chinese companies to build two hydroelectric plants beginning the end of this year, a government official said Saturday.

Environmental groups say the dams threaten the country's ecosystem and the livelihoods of thousands.

Both dams will be located in Koh Kong province in southwestern Cambodia, said Seng Savorn, a spokesman of the Council of Ministers.

China National Heavy Machinery Corp. will take until at least 2014 to complete a US$540 million dam, which should be able to generate up to 246 megawatts of electricity, he said.

Another Chinese company, Michelle Corp., is to build a US$495.7 million dam intended to generate up to 338 megawatts of electricity, he said. The project is due to be completed in 2015.

Electricity generation in Cambodia remains largely undeveloped, with most power plants using fossil fuels. The impoverished Southeast Asian nation also buys electricity from neighboring Vietnam and Thailand.

Power costs in Cambodia are among the highest in the world, and only about 12 percent of its 14 million people have access to electricity, according to the World Bank.

Electricity prices are also a major source of complaint from investors in Cambodia.

In a bid to meet future electricity demand, the government has identified 14 potential hydroelectric dam sites across the country.

Environmentalists have voiced concerns about the impact those projects will have.

In a report earlier this year, U.S.-based International Rivers Network said "poorly conceived hydropower development could irreparably damage" Cambodia.

"Large hydropower projects can incur significant environmental and social costs that risk undermining sustainable development," said the report released in January.

Seng Savorn dismissed the concerns, saying the projects were studied thoroughly before they were approved by the Cabinet.