The gap between electricity supply and demand in Cambodia is significant. The country relies heavily on expensive imported electricity, diesel and other fossil fuels. To fulfill the rapidly growing demand for electricity, many are looking at alternative renewable energy solutions, including biomass power generation. This plan provides an overview of the opportunities in converting waste rice husk to biogas electricity production, produced on GIFT's Global Leadership Programme in partnership with ORIX Corporation, July 2013.

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Husk to Electricity
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Power Generation from 100% Biomass in Cambodia
A proposal for SOMA Group prepared through the
ORIX Global Leaders Programme, July 2013

2. ORIX Global Leaders Programme 2013
Hong Kong based leading provider
of experiential executive learning
programmes
Japanese financial
services group with a
presence in 34 countries
Cambodia’s leading
industrial conglomerate
with a focus on the
country’s development
New entity set up under SOMA
Group focusing on renewable
energy development in Cambodia
2

3. Background: Rice Industry in Cambodia
• Government aims to export 1 million tons of rice by 2015
(400% increase in 3 years)
1200000
1000000
800000
600000
400000
200000
0
2011
2012
2013
2014
2015
Massive increase in rice milling out put is expected in the coming years
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4. Biomass Energy in Cambodia
• Cambodia has significant biomass energy resources including
rice husks.
• Exports of milled rice is expected to increase from 0.2 million
tons in 2012 to 1 million tons by 2015 (A 400% increase in 3
years).
• At the same time, electricity tariffs are high and only 50% of
Cambodians have access to power.
• Rural electrification is even lower, at less than 30%.
Rice husk biomass energy will exploit Cambodia’s skyrocketing rice
production to electrify rural areas.
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5. Biomass Energy
5

6. Biomass Power Generation Technology
• Existing solutions – Gasifier + Hybrid
Diesel Engine
• SOMA Energy’s solution: 100% loose rice
husk gasifier & genset
• Advantages of the new solution
– loose rice husk: eliminates the need for
extra energy inputs through pelletising
and gasification
– 100% diesel free: further reducing power
generation costs required by users
– Byproduct: ash and bio-char, can be used
as soil enhancer, potential to generate
additional income for users and provide
value to Cambodian agriculture
– Lower carbon emission: generally more
environmentally friendly and provides
potential opportunities in carbon offsets
and credits
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7. Biomass Power Generation Technology
Ankur Scientific Energy Technologies Pvt. Ltd.
GE-Waukesha VHP 5904
The retooled GE Waukesha gas engine is
compatible with 100% synthetic gas
produced from biomass gasification for
power generation
The gasification process converts the
feedstock, such as rice husks, into Producer
Gas, ready to feed into the power generator
If fully developed, the biomass gasification technology in Cambodia using rice
husks has great potential to address the country’s energy security.
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8. Vision of SOMA Energy
• SOMA Energy strives to be a leader
in renewable energy development
in Cambodia and to be the catalyst
for promoting biomass energy
solutions
• SOMA Energy aims to be the
pioneer in biomass power
generation, therefore contributing
to rural economic development and
prosperity throughout Cambodia
SOMA Energy is a renewable energy company
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9. SOMA Energy Value Proposition
•
•
•
•
•
SOMA Energy is committed to providing the rural Cambodian population with
clean and low-cost electricity (compare to HFO) generated from renewable
biomass gasification, to fulfill the growing demand for electricity
SOMA power generation uses 100% loose rice husk – an agri-byproduct,
turning agri-waste into electricity and reducing the overall consumption of
diesel and HFO in power generation
By providing access to affordable electricity, SOMA Energy is also playing a key
role in promoting rural economic development
SOMA energy projects supports the rice industry in Cambodia by providing
affordable and stable source of electricity, stablising paddy supply for mills,
reducing post-harvest wastage and leveling the seasonal rice price fluctuations
By providing better drying and storage facilities (both energy dependent) and
management services, SOMA intends to reduce wastage, prevent paddy from
flowing to neighbouring countries through unregulated channels and increase
the income of the rice farmers in Cambodia
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10. Key Stakeholder Analysis
The key stakeholders that SOMA
Energy needs to consider engaging
include:
• Technical partners: Provider of
gasifier (Ankur, SME Renewables),
provider of power generator (GE)
• Financial Partners: corporate
investors, PE firms, development
agencies, banks, mutual funds
• Clients: rice mills, local grid operators
and power distributors, local
factories, local households, national
grid
• Suppliers: rice mills (husk), rice
traders (paddy)
Supplier management with the mills to secure the supply of rice husks is key
to SOMA’s stakeholder management
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11. Biomass Energy in Cambodia
Biomass Energy Generation Challenges :
• Supply chain management
• Secure supply and transportation of
rice husks
• Price volatility of feedstock
• Lack of renewable energy policy and
incentives for producers
• Limited access to financing
• Expanding national electricity grid
• High transportation cost relative to the
value of commodity
Policy environment and feedstock management are the main challenges
facing Cambodia’s biomass energy industry
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12. Option #1: Rice Mill Installation (Schematic)
Local Electricity
Distributor
Farmers
Grid
Paddy
Rice Mills
Husk + Reduced electricity Tariff
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Industrial
Electricity Users

13. Option #2: Remote Electrification (Schematic)
Local Electricity
Distributor
Farmers
Grid
Paddy
Rice Mill
Husk
Power Generation
13
Industrial
Electricity Users

14. Option #3: Rice Storage & Electricity (Schematic)
Local Electricity
Distributor
Farmers
Grid
Paddy
Paddy
<SILO>
Rice Mill
<Power Generation>
Husk + Reduced
electricity Tariff
Industrial
Electricity Users
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15. Comparison of 3 Options
Option #3 of building and operating silos presents the best rate of return
among the three business models, but also requires the largest initial capital
investment. Options #2 can be considered in areas rich in paddy but lacking
in power, as well as alongside Option #3. Option #1 is suitable for regions
with relatively higher concentration of existing mills.
IRR (10
years)
Net investment US$
mil.
Cumulative net
income US$ mil.
1. Generation Unit at
Rice Mill Cluster
13.9%
3.16
2.90
2. New Mill +
Generation Unit
15.2%
6.34
6.39
3. Silo + Generation Unit
20.0%
7.90
10.9
Options
All three options provide a favorable IRR
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16. Comparison of 3 Options
Fincial
Performance
Least Capital
Request
Feedstock
Stability
Three options have been
compared against criteria
including financial and
social benefits, as well as
investment and key
operational considerations
Option 1
Option 2
Ease of
Operation
Social Benefit
Option 3
Option 3 is recommended as it provides greatest overall benefit, in
spite of requiring higher investment and technical expertise
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17. Option #3: Financial Projection
•
•
•
•
•
Capital Investment Requirement: US$ 7.90 million
IRR: 20.0% in 10 years
Payback Period: 5 years
Expected annual revenue: US$ 13.88 million
Expected annual net profit: US$ 1.27-1.30 million
Million USD
Accumulated Profit
12.00
10.00
8.00
6.00
4.00
2.00
Year 1
Year 2
Year 3
Year 4
Year 5
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Year 6
Year 7
Year 8
Year 9
Year 10

18. Risk Analysis and Mitigation: External Risks
Risk Type
Description
Likelihood
Impact
Risk Mitigation
•
Expansion of
National Grid
High
Medium
•
•
Market
Risk
Be aware of the future expansion plan
of the national grid
carefully select project sites to prevent
clashing with grid in the next 5-10 years
•
Establishment
of Secondary
Market for
Biomass
Competition
High
High
Signing of long term captive contract
with rice mills to secure supply of feed
stock
Targeting major rice producing
provinces
Locating the power plant close to source
of feedstock (within 20-30 km radius)
Investing in drying and storage facilities
•
Diversification of business scope
•
•
Medium
Low
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19. Risk Analysis and Mitigation: External Risks
Risk Type
Description
Current lack of
regulation on
renewable
energy
Policy Risk
Unfavorable
policy change
on biomass
energy
solutions
Likelihood
Impact
Risk Mitigation
•
High
Low
•
•
Low
Low
19
•
Influence the government to make
renewable-related policies
Better cost-management to
compete with traditional sources of
power generation
Expand business into other
renewable solutions and services
Move from direct energy provider to
energy services

20. Risk Analysis and Mitigation: Internal Risks
Risk Type
Description
SOMA lacking
experiences
in power
business
Management
Risk
Lack of
financial
independence
and
transparency
Likelihood
Impact
Risk Mitigation
•
Medium
Low
•
•
Medium
Medium
20
•
Employ experienced staff to run and
operate the energy business
Acquire technical know-how from the
technical partners i.e. GE, Ankur, SME
to equip SOMA staff
SOMA energy should be an
independent entity from SOMA Group
SOMA Energy should be responsible in
keeping its own financial statements

21. Risk Analysis and Mitigation: Internal Risks
Risk Type
Description Likelihood
Delay in
recovery of
investment
Impact
Risk Mitigation
•
Medium
High
•
•
Funding
and Capital
Risk
Lack of
sufficient
funding
Medium
Working
capital
locked up in
inventory
High
Medium
•
•
High
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•
•
Strengthening cash flow to be in better
position to deal with unexpected situations
Secure some of the financial liabilities and
obligation through insurance, etc.
Increasing the financial transparency of
SOMA Energy
Establishment of robust financial and risk
management policies
Collaborate with international partners to
explore various funding methods
Establishment of rainy day fund
Sourcing of extra credit lines

22. Cambodian Biomass & SOMA Energy
• Cambodia can be a catalyst for
new biomass energy solutions
• SOMA Energy can be a pioneer
in rural economic development
• Renewable energy can develop
before conventional energy
infrastructure becomes
entrenched
• Contact SOMA to get more
details on investment or
partnership opportunities
The time for biomass energy is NOW
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23. THANK YOU! សូមអរគុណ!
Our team wishes the best for SOMA Group and Cambodia!