Cambodia Investment Review
Royal Group Phnom Penh SEZ (RGPPSEZ) has announced the issuance of a KHR 41 billion (approx. $10 million) green bond in its first tranche, guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank (ADB). An additional USD 10 million is slated to follow in a second tranche. The funds raised will be directed towards green projects in Cambodia, including the development of a wastewater treatment plant and sustainable infrastructure, contributing directly to reducing greenhouse gas emissions and aiding Cambodia in achieving its nationally determined contributions (NDCs).
H.E. Sou Socheat, Director General of the Securities Exchange Regulator of Cambodia (SERC), highlighted the significance of this development for the nation. “Cambodia is vulnerable to climate change and needs more investors to invest in sustainable development with a long-term perspective. Green bonds offer the opportunity to earn a return on their investment while supporting environmental causes. Issuers benefit from accessing capital for sustainable projects, and it also indicates their commitment to contributing to sustainable development,” he stated.
Collaborative Efforts for Green Finance
The issuance is a product of the Cambodia Sustainable Bond Accelerator Program, an initiative driven by a partnership among SERC, the Global Green Growth Institute (GGGI), and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in collaboration with CGIF and GuarantCo, part of the Private Infrastructure Development Group. Through this program, RGPPSEZ was selected last year to receive technical assistance, issuance support, and enhanced investment support, including credit enhancement.
Ms. Shomi Kim, Country Representative of GGGI Cambodia, praised the collaborative efforts that led to this milestone. “The successful issuance and listing of RGPPSEZ’s green bonds exemplify our collective commitment to addressing climate change and advancing sustainable development. This milestone highlights the vital role of innovative financing solutions in mobilizing resources for a greener, more resilient future. This has been a great journey to promote sustainable financing through the Sustainable Bond Accelerator Program, which is also co-funded by the government of the Grand Duchy of Luxembourg through the Global Trust Fund on Sustainable Finance Instruments (GTF),” she remarked.
Dr. Hamza Ali Malik, Director of Macroeconomic Policy and Financing for Development at ESCAP, emphasized the broader implications of the initiative. “The Cambodia Sustainable Bond Accelerator Program stands as a testament to how partnership and cooperation can advance the financing of the SDGs and climate action in the region. This initiative, among other sustainable finance efforts supported by ESCAP in Cambodia, is pivotal in creating a sustainable capital market and a supportive financial ecosystem. We are proud of this collaborative achievement, which sets the stage for a sustainable and prosperous Cambodian economy,” he commented.
Mr. Hongwei Wang, Chief Executive Officer of CGIF, expressed pride in the initiative’s accomplishments. “CGIF is proud to guarantee Royal Group Phnom Penh SEZ’s first bond issuance and Cambodia’s inaugural green bond. This initiative not only signifies a major milestone for RGPPSEZ but also sets a precedent for sustainable development in Cambodia. This milestone is a testament to CGIF’s commitment to fostering sustainable development in the region and further promoting Cambodia’s bond market to support macroeconomic stability. Further, CGIF’s support will enable RGPPSEZ to advance its green infrastructure, promoting environmentally friendly initiatives within Special Economic Zones,” he stated. Wang added, “This bond sets a new standard for other issuers in Cambodia, demonstrating the viability and benefits of green financing.”
More Cambodian Companies Can Access Green Capital
Mr. Nishant Kumar, Managing Director for Asia at GuarantCo, highlighted the catalytic role of the Sustainable Bond Accelerator Program. “We are delighted to be part of the Cambodia Sustainable Bond Accelerator Programme, which has been a catalyst for further sustainable finance activity in Cambodia. GuarantCo has been a strong supporter of sustainable finance for infrastructure in the country and across Southeast Asia through our transactions such as with Cellcard (CamGSM). We are glad that this transaction builds on the broader momentum and paves the way for a future where more Cambodian companies can access green and sustainable capital,” he noted.
At the official Green Bond listing ceremony at the Cambodia Securities Exchange (CSX), Mr. UEMATSU Hiroshi, CEO of Royal Group Phnom Penh SEZ, underlined the importance of the bond issuance. “This green bond is an important step in our company’s involvement in helping Cambodia achieve its climate target and address the gap between investors and investment in sustainable development. This bond presents a compelling opportunity for investors seeking to align their financial goals with positive environmental impacts,” he said.
The launch of sustainable, thematic, and green bonds offers Cambodia a multifaceted approach to balancing environmental and economic development. These instruments not only fund critical projects but also attract investment capital driven by the global sustainability movement, contributing to the broader development of Cambodia’s financial market. Launched in February 2023, the Cambodia Sustainable Bond Accelerator Program aims to accelerate the development of Cambodia’s green and sustainable bond market and associated policies, tools, and mechanisms to facilitate financing towards climate mitigation and adaptation initiatives.
