The Securities and Exchange Regulator of Cambodia (SERC), with support from the Asian Development Bank (ADB), on July 22 issued a Khmer-language guideline handbook on issuing green bonds on the Cambodia Securities Exchange (CSX).
Speaking at a workshop on “Implication of the Development of Sustainable Capital Market in ASEAN to the Development of Sustainable Bond Market in Cambodia” held earlier on the same day, SERC director-general Sou Socheat said that the regulator has been “actively working” with the Metro Manila-based multilateral lender to promote the issuance of green, social and sustainable (GSS) bonds in the Kingdom.
“We are committed to promoting sustainable-bond standards and the publicising the issuance process for Cambodia,” he said. “Underwriters, financial advisers, and potential issuers, I hope you will all join us in the journey of developing the green and sustainable bond market in Cambodia.”
He explained that companies could unlock tremendous advantages by issuing green bonds, including from a tax incentive that was endorsed on February 24.
Socheat was referring to a sub-decree stipulating that eligible companies which issue debt securities representing more than 20 per cent of total assets on a local stock exchange – currently only the CSX – will receive a 50 per cent cut in corporate income tax or eight billion riel ($2 million) until February 23, 2025, whichever is less.
“I am chuffed to say that we have many potential green bond issuers in our economy. I then hope to see more national and international investors investing in green, social and sustainable bonds in Cambodia and throughout the region.
“Notably, your commitment and contribution to curb global climate change will enhance your companies’ reputations and help secure the welfare and wellbeing of future generations,” stressed Socheat.
ADB country director for Cambodia Jyotsana Varma told the workshop that Cambodia’s capital market was at an early stage of development, and that the lender has yet to see a GSS bond issuance in the Kingdom that meets the ASEAN standards.
The ADB believes that the Cambodian capital market is ready to fulfil a bigger role in facilitating the mobilisation of private capital for sustainable investments that could contribute to the Kingdom’s transition to a more resilient future, Varma said.
The bank has been collaborating closely with the SERC to create an enabling ecosystem to support the development of a sustainable finance market in Cambodia, he said.
To assist Cambodia in meeting these objectives, ADB is currently providing technical assistance to select firms wishing to issue sustainable bonds in the Kingdom, he shared, voicing hope that the handbook would be useful for corporates looking to raise funds through the capital market to support sustainability initiatives.
He underscored the timeliness and significance of the workshop when it comes to raising awareness about the benefits and processes tied to GSS bond issuance, commenting that ADB has made “strong achievements” in the regional market.