SERC and ADB meet to promote Green Bonds in Cambodia

Harrison White

The Securities Exchange Regulator of Cambodia (SERC) and the Asian Development Bank in Cambodia have again joined to promote the establishment of green or sustainable in Cambodia’s developing securities market.

Green bonds or sustainable bonds are fixed-income financial instruments which are used to fund projects that have positive environmental and climate benefits.

The meeting was attended by over 140 representatives from both the public and private and hosted H.E. Sou Socheat the Director-General of SERC, Mr. Satoru Yamadera an advisor at ADB and Mr. Kosintr Puongsophol a financial sector specialists at ADB.

Green Bonds in Cambodia
Sou Socheat the Director-General of SERC.

The consultative meetings key outcomes included promoting the awareness of green or sustainable finance among corporate bond issuers as well as understanding green bonds and how these bonds can be integrated as part of financing strategies.

In addition, the two organizations discussed how more development partners such as ADB, Credit Guarantee and Investment Facility (CGIF) can assist in the issuance of sustainable bonds in Cambodia.

Green bonds can boost resilience

The Asian Development Bank has recently stated that channeling savings into such investments can contribute to a green and resilient future for Cambodia, helping achieve the 2022 priorities of the Association of Southeast Asian Nations (ASEAN), which is currently under Cambodia’s chairmanship.

The development organization added developing the Kingdom’s capital markets can boost the country’s resilience to climate change and strengthen micro, small, and medium-sized enterprises (MSMEs), supporting women’s entrepreneurship in particular. To read more about how Cambodia’s securities market can support sustainable investments click here

Speaking to Cambodia Investment Review Seng Chan Thoeun CEO brokerage firm And SBI Royal Securities the CSX best bond underwriter of the decade said: “Sustainable Bonds play a very important role in the world’s transition to net-zero by channeling the fund into green, social, and sustainability projects which attract a lot of companies and organizations to issue or invest in the green, social, or sustainability bonds.

“For Cambodia’s Capital Market, we also foresee a lot of potential opportunities for the company to issue the green bond, as the issuance will provide a lot of benefits to both issuer and investor such as enhancing the reputation, tax incentive, and the lower cost of fund for the issuer,” he added.

Regulator preparing the framework

H.E Sou Socheat, the Director General of SERC, calls for securities underwriting firms and financial advisory firms to work closely with SERC and ADB to promote the green bond market in Cambodia while the green bond issuers will get the technical support and investment opportunities from ADB.

The SERC has recently stated that the government is developing the framework for green bonds to be issued adding that they believe that many investors are now keeping eyes on these products as sustainability issue is our issue, not anyone’s issue.

Green bonds in Cambodia
Mr. Kosintr Puongsophol a financial sector specialists at ADB.

The Cambodian government is currently in the process of launching its first government bond aimed to be launched this year with a value of $300 million. The Law on Government Securities was signed into law by King Norodom Sihamoni on Dec 31, 2020, after the legislation was passed by the country’s Senate.

The law allows the government to issue bonds in Cambodian and foreign currency locally or abroad to finance development needs. To read more about Cambodia’s upcoming government bond click here.

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