Cambodia Investment Review

Green Climate Fund Endorses Cambodian Initiative with $100 Million to Promote Green Economy

Green Climate Fund Endorses Cambodian Initiative with $100 Million to Promote Green Economy

Cambodia Investment Review

In a significant step towards environmental sustainability and economic transformation, the Green Climate Fund (GCF) has given its nod to the Cambodian Climate Financing Facility (CCFF) at its 38th board meeting held in Rwanda. This groundbreaking initiative, buoyed with concessional funding amounting to USD 100 million, is set to bolster Cambodia’s stride towards a greener economy.

The CCFF is crafted as a strategic loan facility, earmarking USD 100 million in concessional financing aimed at supporting sustainable projects within the private sector and providing wholesale funding to financial institutions. This endeavor is to amplify the green economic landscape in Cambodia. The fund is a blend of contributions from the GCF, the Ministry of Economy and Finance of Cambodia, alongside other co-financing partners.

Read more: CCCS23 Report Shares Insights Into Kingdom’s Commitment To A Sustainable Future

At the helm of this initiative’s administration stands the Agricultural & Rural Development Bank (ARDB), with Mekong Strategic Capital (MSC) playing a pivotal role as the co-executing entity, offering independent investment advisory support. The Korea Development Bank is designated as the GCF Accredited Entity, overseeing the execution of the CCFF.

Aimed At Mobilizing Domestic Private Capital

The facility adopts a dual approach; it extends direct lending to private sector climate ventures and partners with local financial institutions. By offering concessional wholesale funding, it enables businesses to undertake projects with positive climate impacts. This strategy is aimed at mobilizing domestic private capital, thereby catalyzing a systemic shift towards climate-focused lending across Cambodia.

Marking a historic milestone, Cambodia emerges as the first Asian country to establish a national domestic climate financing mechanism with the backing of the GCF. This move is seen as a robust endorsement by the international climate finance community of Cambodia’s dedication to climate action.

The CCFF is aligned with Cambodia’s ambitious climate objectives, offering structured financing to businesses in sectors such as renewable energy, energy efficiency, sustainable agriculture and forestry, water infrastructure, and low-emission transportation.

Expressing his views on the initiative, John McGinley, Managing Partner at Mekong Strategic Capital, stated, “The successful launch and approval of the CCFF by the GCF board accentuates our dedication to fostering climate finance in the Mekong Region and beyond. We are heartened by the interest from climate-focused investors looking at co-financing opportunities. Our gratitude extends to all our partners for their unwavering support.”

Global Fight Against Climate Change

His Excellency Eang Sophalleth, Minister of Environment, Royal Government of Cambodia, shared, “The GCF’s endorsement of the CCFF is a leap forward in our climate commitment journey and sustainable development goals. This initiative perfectly aligns with our climate policies and signifies our resolve to address climate change and environmental protection.”

Patrick Murphy, US Ambassador, highlighted the collaborative effort, “The U.S. government lauds the GCF’s approval of the CCFF. Our USAID team provided essential conceptual and technical expertise to propel this initiative forward. This represents a crucial milestone in our global fight against climate change.”

The CCFF stands as a testament to international collaboration and Cambodia’s commitment to spearheading sustainable development and combating climate change, paving the way for a greener and more resilient future.

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