Cambodia Investment Review
Cambodian small and medium-sized enterprises (SMEs) will gain access to more affordable financing for energy-efficient equipment under a newly launched US$20 million Energy Efficiency Revolving Fund (EERF), an initiative designed to lower business operating costs while supporting the country’s clean energy transition.
Launched on July 1 by the Asian Development Bank (ADB) in partnership with the Royal Government of Cambodia, the Ministry of Mines and Energy, the SME Bank of Cambodia, the Credit Guarantee Corporation of Cambodia (CGCC), CIMB Bank PLC, and the Foreign Trade Bank of Cambodia (FTB), the fund seeks to address one of the biggest barriers preventing businesses from investing in energy efficiency: access to finance.
Unlike conventional lending programs, the revolving fund offers SMEs financing on more favourable terms, supported by optional partial credit guarantees that aim to reduce lending risks for banks and lessen collateral requirements for borrowers.
Making Energy Efficiency More Affordable
The EERF has been established under Cambodia’s Energy Transition Sector Development Program and is designed to accelerate investment in energy-efficient technologies among local SMEs, which account for more than 90% of businesses operating in the country.
By making financing more accessible, the program will enable businesses to upgrade machinery, equipment and industrial processes that reduce electricity consumption, lower operating expenses and improve productivity.
The initiative also aims to reduce Cambodia’s reliance on imported fuels while strengthening the competitiveness of local enterprises.
ADB Country Director for Cambodia Yasmin Siddiqi said the revolving fund complements broader reforms supported by ADB to accelerate Cambodia’s clean energy transition while expanding access to inclusive and sustainable finance.
She noted that the initiative comes at a particularly important time as geopolitical tensions continue to highlight the importance of energy security, adding that stronger collaboration between public and private sector partners would help mobilise greater private investment in energy efficiency and support a more resilient economy.
Backed by International Climate Finance
The revolving fund has an initial capitalisation of US$20 million, comprising US$12 million provided by the United Kingdom through the ASEAN Catalytic Green Finance Facility (ACGF) and US$8 million from the Green Climate Fund through the ACGF Green Recovery Program, both supported by ADB.
The financing is expected to contribute to Cambodia’s National Energy Efficiency Policy, which targets a 19% reduction in energy consumption by 2030 compared with business-as-usual levels.
Permanent Secretary of State at the Ministry of Mines and Energy H.E. Dr. Ty Norin described energy efficiency as the “first fuel” of Cambodia’s energy transition, saying it represents one of the country’s most cost-effective strategies for reducing energy costs, strengthening energy security and lowering greenhouse gas emissions.
Credit Guarantees Aim to Unlock Lending
The revolving fund will be administered by the SME Bank of Cambodia, while CGCC will provide optional partial credit guarantees through grant support from the Asia-Pacific Climate Finance Fund (ACliFF).
The guarantees are intended to reduce lending risks for participating financial institutions and encourage lending with reduced collateral requirements—an issue that continues to limit access to finance for many Cambodian SMEs.
The program will also place particular emphasis on supporting women-owned and women-led enterprises, which often face greater challenges in obtaining commercial finance.
Chairman of SME Bank of Cambodia H.E. Dr. Phan Phalla said the initiative builds on the success of the SME Co-Financing Scheme introduced during the COVID-19 pandemic, which expanded affordable financing for businesses across Cambodia.
He said the bank would work closely with participating financial institutions to ensure the rapid deployment of funds and accelerate the adoption of energy-efficient technologies throughout the SME sector.
Banks Expand Green Lending
CIMB Bank PLC and Foreign Trade Bank of Cambodia (FTB) have become the first participating financial institutions under the program and will use the facility to expand their green lending portfolios.
Acting Chief Executive Officer of CIMB Bank Heng Vuthy said access to dedicated financing would allow SMEs to modernise operations, significantly reduce energy costs and strengthen their long-term competitiveness.
Meanwhile, FTB Chief Executive Officer Dith Sochal said the revolving fund’s risk-sharing mechanism would improve lender confidence and help scale investment in energy-efficient projects across Cambodia’s business sector.
As Cambodia continues pursuing industrial growth while reducing its carbon footprint, the new financing mechanism is expected to play a key role in encouraging private sector investment in technologies that improve productivity, reduce energy consumption and support the country’s broader sustainability objectives.
