Cambodia Investment Review
Yuanta Securities (Cambodia) has emerged as a key architect in the development of Cambodia’s green finance ecosystem with the successful structuring and issuance of the Kingdom’s first project bond—a landmark USD 50 million green bond backing a 60MW solar power project in Kampong Chhnang by SchneiTec Dynamic.
Listed on the Cambodia Securities Exchange (CSX) on April 11, 2025, the transaction marks a significant milestone for the renewable energy sector, the evolution of Cambodia’s capital markets, and the Kingdom’s broader sustainability ambitions.
The achievement was made possible through the dedication of Yuanta’s bond team—CEO Han Kyung Tae provided strategic direction and oversight, while project leads Sim Dara and Park Sungbae (Simon) managed the structuring process end to end. Liv Seyhakreach played a pivotal role in execution and coordination. Their collective efforts over one and a half years were instrumental to the project’s success.
Cambodia’s First Project Bond: A Financial Innovation
Yuanta Securities (Cambodia), the sole lead manager of the deal, structured the green bond using a tri-tranche format—comprising a floating-rate guaranteed bond, a semi-floating-rate guaranteed bond, and an unguaranteed bond. This innovative approach was designed to meet the diverse needs of both local and international investors while accommodating the Credit Guarantee and Investment Facility (CGIF)’s exposure limits on a single project.
“This is the first project bond in Cambodia, and the guaranteed tranches were catered to the demand of local investors unfamiliar with such instruments, as well as international investors with concerns about Cambodia’s country risk profile,” explained Han Kyung Tae, CEO of Yuanta Securities (Cambodia). “Meanwhile, the unguaranteed tranche was taken up by investors who were already operating in Cambodia and comfortable with the project’s risk profile.”
The semi-floating-rate bond appealed to local investors seeking returns above bank deposit rates, while the floating-rate bond attracted overseas investors seeking instruments that match liabilities and hedge interest rate risks.
Certified “dark green” by S&P Global’s Second Party Opinion, the bond is aligned with the International Capital Market Association (ICMA)’s Green Bond Principles, ASEAN’s Green Bond Standards, and the Securities and Exchange Regulator of Cambodia (SERC)’s guidelines. The green labeling process was supported through the Cambodia Sustainable Bond Accelerator (CSBA), a joint initiative by SERC, GGGI, UNESCAP, CGIF, and GuarantCo.
“The solar project was an obvious eligible green project,” said Han. “Its environmental impact assessment showed minimal negative impact while offering significant social and environmental benefits, including job creation, improved energy security, and reduced greenhouse gas emissions.”
Market Reception and Investor Appetite
The issuance attracted a wide range of investors—from Cambodian banks and life insurance companies to international commercial banks and an export credit agency. Notably, it introduced several market firsts:
- First project bond: Unlike traditional corporate bonds, the issuer was a special purpose company (SPC) solely established to own and operate the project assets. Investors’ recourse was limited to project assets. This introduces a new fixed-income product class to the market, providing greater portfolio diversification.
- Longest tenor bond to date: With a 15-year maturity, the bond meets the needs of long-duration investors such as life insurers and pension funds.
- Quarterly amortization: Regular repayments improve asset-liability matching and reduce reinvestment and interest rate risks.
- First solar farm with battery storage: The inclusion of a Battery Energy Storage System (BESS) enhances grid stability and energy efficiency.
“The participation of CGIF and experienced anchor investors was essential in building confidence among those new to project bonds,” said Sim Dara, Managing Director and Head of Research. “This allowed the issuer to access broader capital at more favorable pricing.”
While green finance in Cambodia does not yet offer direct financial incentives, Dara noted its broader value. “It serves as a strong marketing tool. Local investors can demonstrate environmental responsibility to stakeholders, customers, and regulators.”
Regulatory Progress and Ecosystem Building
SERC and the CSX have taken steps to promote sustainable finance, including the release of guidelines on issuing Green, Social, and Sustainability (GSS) Bonds and regular capacity-building workshops.
“The regulatory framework already exists and works well,” noted Park Sungbae (Simon), Executive Director and Head of Corporate Finance. “The process for green bonds is largely the same as for non-green bonds, with additional steps for labeling and documentation.”
To date, Cambodia has seen three green bond issuances:
- Golden Tree (~$1.5 million)
- Phnom Penh SEZ (~$10 million, guaranteed)
- SchneiTec Dynamic (~$50 million, project bond)
The National Bank of Cambodia (NBC) has introduced preferential capital adequacy treatment for green project finance—100% risk weighting for pre-operational projects (compared to 130% for non-green) and 80% during operations (vs. 100% for non-green).
Although Cambodia’s Sub-Decree on Tax Incentives for Securities references GSS bonds, the specific details have not yet been released. “We are hopeful that a forthcoming Prakas may provide more clarity, but the timing and scope remain uncertain,” Park said.
Looking Ahead: A Greener Pipeline
Building on the SchneiTec transaction, Yuanta Securities (Cambodia) is preparing additional green and sustainability bond issuances.
“We’re working on another green bond expected in Q4 next year for a solar project with five to six times the installed capacity of SchneiTec Dynamic’s project,” Han shared. “We’re also leading a USD 50 million sustainability bond that will incorporate both green and social elements.”
Han explained that this will be a sustainability bond, not a sustainability-linked bond—a distinction that reflects the bond’s focus on use-of-proceeds rather than performance targets.
“Our growing pipeline reflects strong investor confidence and our team’s capabilities,” Han added. “We are currently the only team in Cambodia with demonstrated experience in structuring project bonds and complex guaranteed-unguaranteed instruments.”
Enabling Cambodia’s Energy and Climate Goals
With Cambodia aiming for 70% renewable electricity by 2030 and carbon neutrality by 2050. Yuanta Securities (Cambodia believes capital markets can serve as a complementary channel to traditional bank loans, mobilizing funds from institutional investors, social security programs, and development finance institutions (DFIs).
Read More: Cambodia Joins Regional Discussions on Climate Finance at ADBI-ADB Roundtable in Tokyo
“The capital market enables efficient mobilization of long-term funds into projects that directly support national sustainability goals,” said Liv Seyhakreach, Associate of Corporate Finance. “Yuanta’s role goes far beyond arranging deals—we design creative financial structures that match issuers’ needs with investors’ expectations.”
With around $1 billion in insurance sector assets under management and rising annual premiums, Cambodia’s domestic institutional capital pool is growing. The National Social Security Fund (NSSF), managing public pension and healthcare funds, also represents a significant source of capital that could be aligned with sustainable investment objectives.
“By bridging the gap between issuer requirements and investor preferences, we help catalyze investment flows toward green infrastructure,” the team concluded. “Yuanta is committed to driving Cambodia’s sustainable finance journey forward.”
