Cambodia's pursuits of “green bonds” and accompanying eco-friendly financing initiatives have shown “excellent progress”, with an expanding roster of companies moving to list the sustainability-linked debt instruments on the local bourse, which has drawn applause from other ASEAN countries.
This is what Securities and Exchange Regulator of Cambodia (SERC) director-general Sou Socheat told The Post on March 21, from Yogyakarta, Indonesia, where he was attending the 38th ASEAN Capital Market Forum (ACMF) Chairs’ Meeting.
Participants lauded Cambodia for Golden Tree Co Ltd’s (GT) issuance of the Kingdom’s inaugural green bond and the work leading up to it, he said, adding that the instrument carried the ASEAN Label which certifies compliance with ASEAN Green, Social and Sustainable Bond Standards.
Member states are supporting and encouraging the issuance of bonds with the label, as a common goal, Socheat said. He committed the Kingdom to the same, reasoning that the bonds are beneficial to the companies, the environment, and society as a whole.
The 10 ASEAN countries have talked at length about the role of green bonds in reducing carbon emissions, he said, stating that Cambodia will have more companies listing the securities, with ACLEDA Bank Plc preparing an offering to be sold later this year.
“We were applauded by all ASEAN leaders for the achievements we’ve made so far – despite the small size of [GT’s] issuance, it is indeed the goal of everyone involved,” he added.
Socheat noted that Cambodia is working with the UN Economic and Social Commission for Asia and the Pacific (ESCAP) and the Seoul-based Global Green Growth Institute (GGGI), under a recently-signed memorandum of agreement (MoA), to promote the issuance of securities carrying the ASEAN Green, Social or Sustainability Bond Label.
On January 19, GT listed the first green bond on the Cambodia Securities Exchange (CSX), raising 6.0721 billion riel ($1.46 million) to expand its business.
A total of 60,721 units were issued at par value of 100,000 riel, carrying a per-annum coupon rate of seven per cent paid semi-annually and a five-year tenor with maturity date of December 6, 2027, according to the CSX website, which noted that the bond was underwritten by SBI Royal Securities Plc, with Cambodia Securities Plc as co-underwriter.
At the listing ceremony, CSX CEO Hong Sok Hour hailed the bond as the beginning of a “green wave”, which he said is indicative of the securities sector’s “active involvement” in the support and broad promotion of eco-friendly management.
“In light of this novel green achievement, I’d like to encourage business owners to consider capital diversification through the CSX, particularly by raising funds through the issuance and listing of three types of corporate bonds – green, social and sustainability – that attract public investors as well as institutional investors, and support the environment, society and the national economy,” he said.
The Joint Statement of the 38th ACMF Chairs Meeting noted that the forum “endorsed the Sustainable Finance Knowledge Hub, which is being developed to serve as a ‘one-stop’ centre to raise awareness and educate participants on sustainable finance-related issues.
“Upon its launch, which is targeted for the end of March 2023, the Knowledge Hub will be accessible on the main page of the ACMF website,” it said.
Around $38.06 billion in ASEAN-labelled green, social, or sustainable bonds or sukuk – a similar instrument also known as “Islamic bonds” – had been issued as of March 15, under the ASEAN Green, Social, and Sustainability Bond Standards introduced in 2017 and 2018.
A total of 18 corporate securities feature on the local exchange – nine stocks and nine bonds. Companies have raised a total of $317 million through their offerings on the CSX, according to Sok Hour.
As of January 19, around 36,000 CSX trading accounts had been opened, he said, adding that the average daily trading value on the bourse reached about $500,000 last year.
The CSX is co-owned by the finance ministry and the Korea Exchange (KRX) on a 55:45 basis.