In February 22, 2023, With the honor permission from H.E. Dr. Aun Porn Moniroth, Deputy Prime Minister, Minister of Economy and Finance and Chairman of the Non-Bank Financial Services Authority, the Securities and Exchange Regulator of Cambodia (SERC) together with the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Global Green Growth Institute (GGGI), signed a Memorandum of Agreement on February 22, 2023 to accelerate financing towards green, sustainable and net-zero projects in Cambodia. As part of this partnership SERC, ESCAP, GGGI, the Credit Guarantee and Investment Facility (CGIF), and GuarantCo part of the Private Infrastructure Development Group, announced the launch of the Cambodia Sustainable Bond Accelerator: Empowering Issuers through Technical Assistance programme.
Cambodia’s financing needs to address climate change impacts and meet Cambodia’s nationally determined contributions (NDC) are substantial. Without climate adaptation and mitigation investment, it is estimated that the impact of climate change could cost Cambodia 1 percent of GDP per year for the next decade and could potentially wipe out all economic gains by 2050. According to the latest NDCs, Cambodia’s climate mitigation and adaptation plans would require total funding of roughly $7.8 billion. Innovative financing instruments such as green and sustainable bonds have a strong potential to close this financing gap by driving institutional and private capital to prioritize the sustainability agenda.
“Green, sustainability and sustainability-linked bonds have demonstrated to be transformative investment vehicles to channel financing towards green and sustainable initiatives,” said Armida Salsiah Alisjahbana, Under-Secretary-General of the United Nations and Executive Secretary of ESCAP. “Through our partnership with SERC and GGGI we are proud to be working to accelerate financing towards climate adaptation and mitigation initiatives in Cambodia. We are also pleased that the initiative has generated collaboration and support from the CGIF and GuarantCo as key collaborators.”
The programme will support Cambodian companies planning to issue green, sustainability and sustainability-linked bonds through addressing the challenges faced by bond issuers by eenhancing issuers’ abilities to meet international thematic and sustainability-linked bond standards and by lowering the cost of issuance. Over the course of this year, the initiative will select up to four companies, which will receive technical advice and capacity building on the green bond issuance preparation, and investment support for roadshows, connecting to investors, and credit enhancement where feasible.
“Acknowledging the urgent need to combat climate change, SERC has taken serious action to support sustainable development through promoting the issuance of green, sustainability, and sustainability-linked bonds, and has been working closely with development partners to do so. I strongly believe that this cooperation with ESCAP and GGGI, with the support of the CGIF and GuarantCo will contribute to achieving our goal. Fighting climate change is the responsibility of us all, so please join us in issuing and investing in green, sustainability and sustainability-linked bonds in Cambodia,” said H.E. Sou Socheat, Delegate of the Royal Government in charge as Director General of the Securities and Exchange Regulator of Cambodia.
“This collaborative initiative represents a significant commitment to support the issuance of green and sustainability bonds in Cambodia. GGGI is honored to support the Royal Government of Cambodia in maturing the thematic bond market through private sector participation and enhancing the country’s sustainable finance in the pursuit of a greener economy,” said Frank Rijsberman, Director-General of GGGI.
The Cambodia Sustainable Bond Accelerator initiative builds on the SERC, ESCAP and GGGI partnership, which aims to accelerate the development of Cambodia’s green and sustainable bond market and associated policies, tools and mechanisms to facilitate financing towards climate mitigation and adaptation initiatives. Through a series of targeted measures focusing on both issuance and post-issuance processes, the partnership will contribute to enhancing the ability and interest of issuers in Cambodia to move from traditional bond issuance to green, sustainability and sustainability-linked issuance, and ultimately expand climate-related investments in Cambodia.