[{"bbox": [97, 152, 1135, 313], "category": "Text", "text": "Therefore, to maintain its competitive edge, Cambodia has to accelerate adoption of sustainable energy practices, and increase compliance with higher sustainability standards in the sector. Studies have shown that adoption of sustainable energy practices and improving working environment have a positive return on investment. For example, a study on four specific sectors, including garment industry, has shown that lower use of resources including energy would lead to reduced costs and higher GDP (an increase in real GDP by USD 2.7 billion in 2030), with the garment sector GDP improved by 46%²¹."}, {"bbox": [97, 338, 1024, 366], "category": "Text", "text": "To support Cambodia in this direction, the action will address a number of key challenges, including:"}, {"bbox": [135, 366, 1135, 686], "category": "List-item", "text": "*   **Weak regulatory environment:** Cambodia has made progress by developing key policies to support the sector (GFT strategy, the NEEP and upcoming Solar PV regulation). Implementation of these policies requires development of supporting regulations (i.e. sub-decree on performance standards) and setting up of certain governance structures, which are currently lacking. This action will support the development of specific key regulations for the GFT sector (notably national standards and measures to implement the GFT strategy); specific elements of the NEEP (such as national energy auditor training and certification scheme, Minimum Energy Performance Standards (MEPS)); sector action plans to guide implementation at key ministry (MISTI); and coordination of the GFT strategy implementation through an advisory committee; effectively integrating gender mainstreaming. Support to the solar PV regulation to ensure that the policy is conducive for investment is currently provided by UNDP. Additional support could be identified during the implementation. Close collaboration with TAFTAC and Eurocham is envisaged to influence policy on solar PV from the private sector side."}, {"bbox": [135, 686, 1135, 1085], "category": "List-item", "text": "*   **Limited industry awareness and capacity to implement and adopt sustainable energy practices and improved working environment:** a majority of the factories are concerned about high energy prices, which impact their productivity and competitiveness. They see the need to green their business to keep market access, e.g. to the EU. However, most would not have the knowledge or capacity to become more energy efficient or green. Over two-third of the factories report the need for more training to build capacity in the field of sustainability²². Some factories consider that lack of available skills is as serious as lack of finance, and a barrier to environmental performance²³. Climate change related Operational Safety and Health (OSH) issues are increasing, resulting in suboptimal working environment in the factories. This is compounded by poor factory design, insufficient ventilation, and poor management of process heat (ironing, boilers etc.), leading to hot spots in the factories. There is limited support currently to improve the working environment, and it is often treated as an expensive standalone issue. The absence of a certified sustainable fuelwood supply chain is another key issue in the sector, having contributed to forest depletion; with an upcoming revision of HIGGs index (a key index used by fashion brands to identify social and environmental performance of factories) to account for the source and sustainability of fuelwood, this issue will undermine the attractiveness of sourcing GFT products from Cambodia."}, {"bbox": [135, 1085, 1135, 1454], "category": "List-item", "text": "*   **Limited availability and access to key support services, particularly financing:** implementation and adoption of sustainable energy practices, particularly solar rooftops, require both technical expertise and affordable financing, with a supportive regulatory environment to justify long-term investments. This is especially true for the context of Cambodia, where factories are mostly foreign owned and make investment with a short term horizon (3-5 years). Energy Service Companies (ESCOs) are key to address this challenge, but the market is almost inexistent. The NEEP recognises that the lack of market mechanisms and regulations supporting ESCOs development is a barrier to Energy Efficiency in Cambodia, and a study conducted by the current EU Switch Garment project indicates a low ESCO-readiness landscape. To bridge this gap, the action will seek a possible solution in the form of a Green Factory Accelerator, an institution (industry associations) with capacity to support factories to understand technical quotations, select and procure services, and develop proposals to access affordable sources of financing to make needed investments in sustainable energy practices. Such an accelerator is currently absent, but can be explored and made viable through its ability to aggregate demands from several factories, and access the carbon market."}, {"bbox": [97, 1504, 1135, 1558], "category": "Text", "text": "Identification of main stakeholders and corresponding institutional and/or organisational issues (mandates, potential roles, and capacities) to be covered by the action:"}, {"bbox": [86, 1586, 842, 1607], "category": "Footnote", "text": "²¹ GGGI (2018) The Economic, Social and Environmental Impacts of Greening the Industrial Sector in Cambodia"}, {"bbox": [86, 1607, 462, 1627], "category": "Footnote", "text": "²² GERES & USAID (2022) Training needs Assessment"}, {"bbox": [86, 1627, 130, 1644], "category": "Footnote", "text": "²³ Ibid"}, {"bbox": [1038, 1682, 1143, 1706], "category": "Page-footer", "text": "Page 7 of 29"}]