Cambodia Investment Review
Executive Director of Mekong Inclusive Ventures and Agile Development Group, Mr. Ian Jones, a veteran with 14 years of experience in social and environmental impact ventures, spoke with CIR Leader Talks after delivering a keynote presentation at the Switch to Solar Start Up Showcase 2023; providing an in-depth analysis of Cambodia’s evolving landscape in impact ventures and climate finance.
Ian who via Red Hat Impact has deployed over AUD$1.5 million in impact debt globally in 2022 is also a founder and director of multiple initiatives that create, support, and build capacity for inclusive ventures. His work has been instrumental in designing and delivering ideation, incubation, and acceleration programs for organizations like Energy Lab. He also consults for TetraTech, SecondMuse, and other notable firms.
His presentation titled: Overview of Market Progression for Impact ventures and Climate finance focused on unlocking impact capital through adapted financing options for ventures in climate resilience and carbon market highlighting the entrepreneurial ecosystem in Cambodia is like a living organism, constantly adapting and evolving.
A Strategic Mix of Financial Instruments to Sustain and Scale
Opening his keynote Ian emphasized the importance of a robust entrepreneurial ecosystem. “A thriving entrepreneurial ecosystem is the backbone of any successful venture. It’s not just about funding; it’s about the networks, the mentorship, and the culture that collectively contribute to fostering entrepreneurship,” he elaborated.
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Discussing human capital in ventures, Ian pointed out that while there is a wide range of incubation programs that strengthen learning, these programs are often driven by the local and international funders which often affects their length and timing. “The key is to align the objectives of the funders with the real-world needs of the ventures. Otherwise, we risk creating a disconnect that can stifle innovation,” Ian warned. “The metrics we use to measure success in these programs often don’t capture the full picture. We need to focus on action learning and the retention and use of knowledge.” Pointing out that the timing of these programs often doesn’t align with the operational realities of running a venture. “Program initiatives need to be more in tune with the entrepreneurial pulse,” he added.
With Universities increasingly embedding entrepreneurship at early stages, Ian noted that with this investment in education, it ensures a supply of high-level human capital for future clean energy ventures.
On the topic of government involvement, Ian highlighted the release of the Cambodia Digital Economy and Society Policy Framework by the Ministry of Economy and Finance. “This is a great step in the right direction, and it is fantastic to see the government investing in long term strategies, but it is also a timely reminder that implementation needs to be as agile as the ventures it aims to support,” he said. The framework includes 44 specific policy measures aimed at developing digital infrastructure and building trust in digital systems, which is critical to ensure efficiency and growth across all sectors.
In the financial sector, Ian observed that impact ventures are learning to re-focus on earned revenues as grant capital becomes increasingly scarce. “The days of relying solely on grants are over. Ventures need to have a strategic mix of financial instruments to sustain and scale,” he advised. He also emphasized the need for financial literacy among ventures, stating, “Understanding the basics of cash flow management is not a luxury; it’s a necessity.”
Ian also delved into market trends, noting that customers and markets are evolving, both digitally and financially. “Adaptability is the name of the game. Climate change is not waiting for us; we need to be proactive rather than reactive,” he said. He also noted that there are still major opportunities for ticket sizes between $50,000 and $250,000 in climate finance. “There’s a misconception that Cambodia is not a viable market for substantial investments. That’s far from the truth,” he asserted.
Foster An Environment Where Innovation Can Thrive
On the cultural front, Ian mentioned that while entrepreneurship is celebrated in Cambodia, cultural power dynamics often reduce innovation. “We need to break free from traditional hierarchies that inhibit creativity and foster an environment where innovation can thrive,” he urged.
Looking to the future, Ian outlined some positive next steps for the ecosystem. “Cross-ministry dialogue is not just beneficial; it’s essential for streamlining investment and reducing the burdens of doing business,” he said. He also emphasized that impact ventures need to continually strengthen internal policies to meet the requirements of funders “Compliance is not a checkbox; it’s an ongoing process that ventures need to integrate into their operational fabric,” he concluded.
If impact ventures arent ready to take on capital, then it becomes a catch-22 situation. Funders will continue to overlook Cambodia, and ventures will continue to struggle to raise financing.
Ians analysis serves as a roadmap for stakeholders in Cambodia’s impact ventures and climate finance sectors. As the landscape continues to evolve, the insights and direct comments provided offer valuable guidance for navigating the complexities of this emerging ecosystem.
