In March 2023, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the Global Green Growth Institute (GGGI) and the Securities and Exchange Regulator of Cambodia (SERC), in collaboration with the Credit Guarantee and Investment Facility (CGIF) and GuarantCo, part of the Private Infrastructure Development Group, launched the Cambodia Sustainable Bond Accelerator. ESCAP and our partners are pleased to announce that three private-sector bond issuers have been selected and will be provided with green and sustainability bond issuance support in 2023.
The selected issuers are:
- Amret PLC - A Cambodian microfinance depositing-taking institution which will prepare to issue a US$ 50 million sustainability bond.
- Golden Tree Co. Ltd. - A real estate company that will be supported to issue its second green bond in the amount of US$ 25 million for green building development.
- Royal Group Phnom Penh SEZ - A publicly listed company that manages Phnom Penh Special Economic Zone and will be supported in a $20 million sustainability bond.
While bond issuers in developing markets generally face considerable barriers to issuance, issuers of thematic bonds (green, social, and sustainability bonds) are further constrained due to the issuer's limited awareness and capacities, as well as higher issuance costs. Collectively, CGIF, ESCAP, GGGI and GuarantCo will provide technical assistance and support to prospective issuers, including support in the development of bond frameworks, meeting best practices, facilitating post-issuance reporting and providing co-financing options to decrease bond issuance costs and investment support.
Overall, the Accelerator provides the selected issuers with the technical and financial assistance required to support green and sustainable bond issuance on the Cambodia Stock Exchange and other listing bodies, as appropriate. Additionally, three additional prospective bond issuers were also shortlisted for support and will receive preparatory support for their issuances as they move forward.
"The launch of the Cambodia Sustainable Bond Accelerator marks a significant milestone in our collective efforts to promote green and sustainable finance in the Asia-Pacific region. By addressing the barriers faced by bond issuers in developing markets and enhancing their awareness and capacities, we aim to unlock the potential of thematic bonds to contribute to the transition to a more sustainable and resilient future," said Armida Salsiah Alisjahbana, United Nations Under-Secretary-General and Executive Secretary of ESCAP.
The Government of Cambodia has prioritized climate mitigation and adaptation as one of the top priorities in its national development strategy. The funding needed to achieve these goals is substantial. In Cambodia's latest nationally determined contribution (NDC), the government of Cambodia declared that its climate mitigation and adaptation plans would require total funding of roughly $7.8 billion. Thematic bonds have the potential to close this financing gap by mobilizing investment for the public and private sector for green and sustainability initiatives.
"The Sustainable Bond Accelerator program in Cambodia has achieved significant milestones. The sustainable bond size of three potential issuers collectively is around USD95 Million, which is close to 50 per cent of the current plain bond listed in Cambodia. GGGI remains committed to supporting private sector issuers in identifying green projects, sustainable bond framework development and providing credit enhancement opportunities to promote sustainable financing in Cambodia," said Dr. Frank Rijsberman, Director-General of GGGI.
"SERC, with our development partners ESCAP and GGGI, is pleased to announce the selection of private-sector bond issuers to receive support under the Cambodia Sustainable Bond Accelerator. This is a crucial step towards growing Cambodia's capital market and achieving our goal of encouraging the use of green, sustainability, and sustainability-linked bonds to aid private sector growth and sustainable development in Cambodia." H.E Sou Socheat, SERC Director General
By the end of 2023, ESCAP and its partners look forward to supporting three new green and sustainable bond listings in Cambodia.
