1 Un-official adaptationtranslat by pengtt


									          Un-official adaptation/translation of the Khmer Official version (by Hing Kunthap)

                                        Kingdom of Cambodia
                                        Nation Religion King

                                         Minute of Meeting

A Rural Electrification Fund Board (REFB) meeting was opened on the 29th November 2005 at
08:30 hours, under the Chairmanship of H.E. Suy Sem, Minister of Ministry of Industry, Mines
and Energy (MIME) and Chairman of the REFB, with the objectives of examining and adopting
the Statute, the Internal Rules and the meeting agenda of the REFB.

I. Participants' presence

1. H.E. Suy Sem                   Minister of Industry, Mines and Energy
2. H.E. Khun Ngeth                Deputy Director, Ministry of Rural Development
3. Mr. Tekreth Samrach            Representative of the Council of Ministers
4. Mr. Vin Pros                   Representative of the Ministry of Interior
5. Mr. Edvard Baardsen            Representative of Donors
6. Mr. Andy Kun                   Representative of the Association of Banks in Cambodia (ABC)
7. Mr. Kong Puthy                 Representative of the Rural Electricity Enterprises
8. Mr. Seang Hac                  Representative of NGO
9. Mr. Kem Leang                  Representative of Rural Electricity Users.

B. Project Management Unit (PMU)

1. H.E. Khaut Randy               Secretary of State, Chairman of the PMU
2. H.E. Sat Samy                  Under Secretary of State, PMU Member
3. H.E. Tun Lean                  Director General of Energy, PMU Member
4. Mr. Cheap Sour                 Deputy Director of the Dept of Energy Development, Assistant to
                                  the PMU
5. Mr. Toch Sovanna               Deputy Director of the Dept of Energy Technique, Assistant to
                                  the PMU
6. Mr. Hing Kunthap               Adviser

C. Observer                       Mr. Samchhan Sopheaktra, from ABC


Two Senior Officials of the REFB were authorized to be absent:

1. H.E. Suong Mengkea             Representative of the Ministry of Economy and Finance, was
                                  hospitalised for health reasons.
2. H.E. Ty Norin                  epresentative of Electricity Authority of Cambodia, in mission

II. Gists & Results of the Discussions

A. Discussions & Adoption of the REFB Statute

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Thanks to in-depth discussions during the informal meeting of 24th November 2004, only
                            remaining small details of wordings in Cambodian language, like
                            the word “gratuity” (Note by Hing Kunthap : reference Article 13:
                            conflict of interest, point b) were discussed and agreed during the 29th
                            November 2005 meeting.

The whole Statute was adopted unanimously by all the REFB Members (09 voices for 09

B. Discussions & Adoption of the REFB Internal Rules

As above, thanks to in-depth discussions during the 24th November 2005 meeting, only
remaining small details, the REFB unanimously agreed to take out three references to regulation
not linking to Article 2 of the Royal Decree of 4th December 2004 establishing the Rural
Electrification Fund (as an autonomous public institution):

     1. Royal Kram No. CS/RKM/0696/03 dated June 17, 1996 on the General Statute of
        Public Enterprises;
     2. Sub-decree No. 41.ANK.BK dated August 06, 1997 on the implementation of the Royal
        Kram on the General Statute of Public Enterprises;
     3. Sub-decree No. 42.ANK.BK dated August 06, 1997 on the Accounting Commissioner of
        Public Enterprises.

The Internal Rules was unanimously adopted by all the REFB Members (09 voices for 09

C. Discussions on the PMU Programme

The discussions came out from the Progress Report, which was effected by the PMU, according
to the meeting agenda, on the following REF activities: (a) Policy on Renewable Energy –based
Rural Electrification; (b) Strategy on Renewable Energy – based Rural Electrification; and (c)
Action Plan for Renewable Energy and the schedule of selection and hiring of:

       1.   Executive Director of REF Secretariat;
       2.   Hiring of Payment Agent;
       3.   Renting a building to be the head office of the REF; and
       4.   Hiring of an International Technical In-house Adviser for REF projects.

The REFB unanimously adopted the second meeting date (23rd and 24th January 2006) and the
following agenda for discussion:

       (a) Policy on Renewable Energy-based Rural Electrification;
       (b) Strategy on Renewable Energy-based Rural Electrification; and
       (c) Action Plan on Renewable Energy – based Rural Electrification.

The REFB unanimously decided on the choice of the National Bank of Cambodia (NBC) as the
REF Payment Agent and unanimously adopted the REF Organisation Structure.

The meeting requested the PMU to review and update the schedule of different PMU activities.

Minute 1stREFBMeeting29Nov05_Eg                  2
III. Others

The meeting raised the question of the payment of sitting allowance of the REFB (Note by Hing
Kunthap: as foreseen in the REFB Statute, Article 8, at the end). Out of the discussions, the meeting
agreed to adopt the following rates, which will be submitted, for approval, to the Ministry of
Economy and Finance and the Ministry of Industry, Mines and Energy:

       (a) 70 US$/person for each meeting of Members of the REFB;
       (b) 40 US$/person for each meeting of the PMU;
       (c) 20 US$/person for each meeting of the PMU Assistants.

Finally, H.E. Chairman of the meeting thanked Their Excellencies and Gentlemen for their
participation to the event, which ended at 11:30 hours in a good atmosphere.

Seen and Accepted                                              Secretary
Phnom Penh, 29th November 2005                                 Toch Sovanna
Rural Electrification Fund Board
Suy Sem

Minute 1stREFBMeeting29Nov05_Eg                  3
                          RURAL ELECTRIFICATION FUND (REF)
                                   First Board Meeting
                                   29th November 2005


08:30-08:45                  Opening Speech by H.E Suy Sem
08:45-09:00                  Approval of Agenda of the First Board Meeting on 29 November 2005
09:00-09:20                  Progress Report of PMU by H.E. Khlaut Randy
09:20-09:40                  Break and Photo session
09:40-10:20                  Discussion and approval of the REFB Statute
10:20-10:50                  Discussion and approval of the REFB Internal Roles
10:50-11:20                  - Discussion on REFB Tentative Schedule
                             - Discussion on Seating Allowance
                             - Discussion on agenda of the Second Board Meeting

11:20-11:30                  Closing Remark by H.E Suy Sem
12:00                        Lunch at Le President Hotel

Agenda 1stREFBMeeting29Nov05_Eg                      4
                                  RURAL ELECTRIFICATION FUND
                           First Meeting of Rural Electrification Board (REFB)
                                            29th November 2005
                           The Ministry of Industry, Mines and Energy (MIME)
                                         Phnom Penh, Cambodia

His Excellency Suy Sem, Minister of MIME & Chairman of the REFB,
Excellencies and Gentlemen,

After several years of difficult and hard works under the leadership of Their Excellencies Suy Sem
and Ith Praing, our Team, the Rural Electrification Fund Project Management Unit (PMU) is proud
to be present here today, to welcome the honourable REF Board Chairman, Vive-Chairmen, and
Members in the REFB First Meeting. Before going to the present working agenda, please allow me
to give you a brief background information on why the REF is established by the Royal
Government of Cambodia (RGC).

The Millennium Development Goal (MDG), meaning substantially reducing the population poverty,
is the RGC’s goal. Electricity is one important ingredient of this poverty reduction policy. And since
in 2005, 82 % of the Cambodian population live in rural areas, most of these being “dark zones”,
rural electrification is one important mission of MIME. The objectives –for which REF is created as
a public institution, with an administrative, managerial, technical and financial autonomy – are:

     1. To promote the equitable rural electrification coverage by facilitating the population’s access
        to electricity at affordable price for economic, social, household uses, thus contributing to
        poverty reduction;
     2. To promote and encourage the private sector to participate in providing the sustainable rural
        electrification services, in particular for the exploitation of the economic application of well
        proven, technically and commercially, energy technologies of new and renewable.

In this respect, the RGC has a two-step goal: by the year 2020, all Cambodian villages will have
access to electricity of different forms (EDC and REE grid extension, micro/mini hydro, solar
home system, from battery charging system, biomass/biogas from tree farming stations, wind, etc.);
and by the year 2030, at least 70 % of all rural households will have access to grid quality electricity.

Thus the RGC, with the World Bank/Asian Development Bank’s Rural Electrification and
Transmission Project (RE&T), with Thai Entrepreneur’s project, and other projects aim to
strengthen the existing generation, distribution and transmission capacity, with 200 MW
transmissions lines from Vietnam to Phnom Penh, via Takeo and linking Takeo to Kampot – with
Kamchay hydro project of 180 MW – and then linking Kampot to Sihanoukville. There is also a
Thai 80 MW transmission project linking Thailand to Siem Reap, Battambang and Banteay Mean
Chey via Poipet. All these Transmission and Large Power Plants Projects aim to achieve several
objectives at the same time: meeting rapidly Cambodian huge demands of cheap, adequate and
reliable electricity and at the same time allowing the Cambodian Power Sector to build up its own
“mixed-resources fuels/energies”, which will guaranty the security of Cambodia electricity supplies,
with the cooperation of Cambodia’s neighbouring countries.

Coming back to the REF, I would like to point out that this establishment is managed by the Board.
And before this Board is established and in full operation – together with its Secretariat – its general
tasks were, are and will be conducted by the PMU. This unit facilitates the implementation of the
REF until REF can operate satisfactorily. This PMU, created by MIME’s “Prakas” (ministerial
decision) is composed of:

          1. H.E. Khlaut Randy, Secretary of State, PMU’s Chairman,

PMUProgressReport ByH.ERandy 1stREFBMeeting29Nov05_Eg   5
          2. H.E. Dr. Sat Samy, Under Secretary of State, Member,
          3. H.E. Tun Lean, Director General of Energy, Member,
          4. Mr. Chan Sodavath, Director of EDC, Member, and
          5. Mr. Nget Sakhân, Chief Cororate Finance of EDC, Member.

Three people work for the PMU: Mr. Andrew Williamson, an Australian Volunteer to MIME/DET
up to January 2005, Mr. Toch Sovanna of MIME and Kunthap Hing.

A first meeting of the PMU was held on the 26th February 2004. A second meeting, held on 11th
January 2005, was chaired by H.E. Suy Sem, Minster of MIME and with the participation of H.E.
Dr. Ty Norin, Chairman of Electricity Authority of Cambodia (EAC). We evaluated different issues
related to the REF implementation project action plans, in particular after the promulgation of the
Royal Decree.

Up to today, what does the PMU achieve and it does not yet do ?

A. What are the (World Bank Group’s grant & loans) Main Credit Conditions:

A.1. The Effectiveness conditions, such as "Initial deposits (by the RGC) of Counterpart Funds" or Legal
Advices of the Ministry of Justice, etc. were all met during the first semester of this year 2005.

A.2. Disbursement conditions: Establishment of the REF, and making it fully operational in a manner
satisfactory to IDA.

A.2.1. What have been done up to today ?
   - Issuance of REF Royal Decree, which is promulgated by the King on 4th December 2004.
   - Appointment of REFB Chairman, Vice-Chairmen & Members by a sub-decree, which is
       decided on the 29th September 2005 by the Prime Minister.
   - "Appointment of an independent payment agent": Choice of the National Bank of
       Cambodia (NBC).

     NOTE: Recruitment of a local technical in-house adviser in October 2005, fully engaged in the
     REF establishment.

A.2.2. What have not yet been done or in the process of doing?
- Establishment of a REFB Statute and internal regulation: these are the subjects of this meeting
of the 29th November 2005. In this respect, we would appreciate your comments on the
frequency of REFB meetings, particularly for in the starting period of the REF Operations.
- Establishment of a financial management and accounting system;
- Adoption of the Financial Management Manual
- Adoption of the REF Operational Manual;.
- Training of a REF Staff.

B. Other works which needed to be done and/or updated

In preamble, we need to fulfil all the disbursement conditions, in particular to achieve what have not yet been done or in
the process of doing (reference: paragraph A.2.2. above). As we now have the means to perform our jobs, we should use
these means.
1. Head Office for the REF: we need to look for, again, a new Head Office.
2. Recruitment of REF Secretariat Staff and elaboration of REF Staff personnel policy and internal regulations.

3. Updating Renewable Energy - based Rural Electrification documents: Policy, Strategy and Action Plan.
At least there are three main issues, which need to address as soon as possible:

PMUProgressReport ByH.ERandy 1stREFBMeeting29Nov05_Eg       6
3.1. REF Project financing: commercial banks or loans institutions with a much cheaper interest
rate and on a much longer maturity period.

3.2. Much longer term commitment from the WB/ADB groups and other international
donors/institutions (and not limited to the end of 2008 only). In this respect, we need to mobilize
the international communities to ensure a steady flow of resources to finance the REF. Our first
TWO-year success are vital for this support from Donors.

3.3. Various incentives, such as duty & tax exemption for renewable energy imported equipment,
facilitating various administrative formalities in order to lower the investment cost, adapted technical
standards related to REE’s distribution projects for example, etc.

We need to incorporate JICA's "The Master Plan Study on Rural Electrification by Renewable
Energy in the Kingdom of Cambodia", this renewable energy master plan being available by
February 2006 ?

Most of, if not all, the above documents would need to be translated in Khmer and approved by the
REFB, prior to their implementation.


     -    Meeting remaining Main Credit Conditions, such as:
          1. the REFB Statute and Internal Regulation, which are the subjects of the 29th
             November 2005 meeting;
          2. Appointment of an Independent Payment Agent, with the confirmation by the
             REFB on the choice of the National Bank of Cambodia;
          3. Establishment of a Financial Management & Accounting System, and Adoption of
             the Financial Management Manual;
          4. Adoption of the REF Operational Manual.

     -    Updating of Renewable Energy – based Rural Electrification documents: Policy,
          Strategy and Action Plan, by Incorporating the important JICA’s Master Plan Study;
     -    Recruitment of the Executive Director, by mid-January 2006;
     -    Recruitment of Staff for the REF Secretariat as soon as possible, and Elaboration of
          the REF Personnel Statute;
     -    Training of REF Staff;
     -    Selection of consultants for various REF TA (see Annex);
     -    Other works, such as Head Office for the REF, office equipment, etc.

Excellencies and Gentlemen, the above issues are NOT an exhaustive list. We mention only the
most important elements. The next coming two years are very vital for our Country in terms of
insurance for future assistance of Donors.

We remain very attentive to your suggestions. And we remain available for any additional query you
may require.

On behalf of all the PMU Team, I would like to thank you for your kind attention.

                                                                                          Thank You!

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                           REF TECHNICAL ASSISTANCE (TA) PACKAGE:

     1. Selection of a short term Cambodian Procurement Assistant for assisting the REF’s
        efforts to select and recruit other TA;

     2. Selection of an International Technical In-house Adviser to assist the REF Secretariat
        with the establishment & day-to-day operations of REF: by mid-December 2005. One of
        her/his deliveries is the “REF Operational Manual”.

     3. Financial Management Firm for the establishment of a financial management and
        accounting systems, with a target date set at mid-December 2005. One of its deliveries is the
        “REF Financial Management Manual”;

     4. Renewable Energy Business Team, to assist developers and communities to prepare high
        quality proposals for REF funding;

     5. Rural Income Promotion Team to develop end-use activities in order to increase income-
        generation opportunities;

     6. Rural Electricity Enterprise (REE) Support Team to assess the capacity and needs of
        REE with respect to the technical standards and business management;

     7. Financial Institutions Support Team to train the “Financial Institutions in Cambodia”
        in loan appraisal and supervision capacities of renewable energy technologies.

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