Three local firms have been chosen to receive assistance from the Cambodia Sustainable Bond Accelerator programme to pursue their goals of raising a total of roughly $95 million through the sale of green or sustainability bonds, according to a UN Economic and Social Commission for Asia and the Pacific (ESCAP) statement issued on June 26.
The Securities and Exchange Regulator of Cambodia (SERC), ESCAP and South Korea’s Global Green Growth Institute (GGGI) had launched the support programme in March, in collaboration with Asian Development Bank (ADB) trust fund Credit Guarantee and Investment Facility (CGIF) and Mauritius-based GuarantCo Ltd, part of the London-headquartered Private Infrastructure Development Group (PIDG), the statement noted.
Two of the companies are microfinance deposit-taking institution (MDI) Amret Plc and public-listed industrial park operator Royal Group Phnom Penh SEZ (PPSP), which aim to issue $50 million and $20 million sustainability bonds, respectively.
Real estate firm Golden Tree Co Ltd, meanwhile, is looking to offer its second green bond, to the tune of $25 million “for green building development”, the statement said.
“Collectively, CGIF, ESCAP, GGGI and GuarantCo will provide technical assistance and support to prospective issuers, including support in the development of bond frameworks, meeting best practices, facilitating post-issuance reporting and providing co-financing options to decrease bond issuance costs and investment support,” it added.
UN undersecretary-general and ESCAP executive secretary Armida Salsiah Alisjahbana hailed the programme’s launch as “a significant milestone in our collective efforts to promote green and sustainable finance in the Asia-Pacific region”, according to the statement.
“By addressing the barriers faced by bond issuers in developing markets and enhancing their awareness and capacities, we aim to unlock the potential of thematic bonds to contribute to the transition to a more sustainable and resilient future,” she was quoted as saying.
GGGI director-general Frank Rijsberman likewise described the accomplishments of the Sustainable Bond Accelerator programme in Cambodia thus far as “significant milestones”.
“The sustainable bond size of three potential issuers collectively is around $95 million, which is close to 50 per cent of the current plain bond listed in Cambodia.
“GGGI remains committed to supporting private sector issuers in identifying green projects, sustainable bond framework development and providing credit enhancement opportunities to promote sustainable financing in Cambodia,” he was quoted as saying.
The statement noted that although climate mitigation and adaptation have been given high priority by the government in its national development strategy, there is still a “substantial” amount of financing required to accomplish these and associated objectives.
“In Cambodia’s latest nationally determined contribution (NDC), the government of Cambodia declared that its climate mitigation and adaptation plans would require total funding of roughly $7.8 billion. Thematic bonds have the potential to close this financing gap by mobilising investment for the public and private sector for green and sustainability initiatives,” it added.
SERC director-general Sou Socheat said the securities regulator “is pleased to announce the selection of private-sector bond issuers to receive support under the Cambodia Sustainable Bond Accelerator.
“This is a crucial step towards growing Cambodia’s capital market and achieving our goal of encouraging the use of green, sustainability, and sustainability-linked bonds to aid private sector growth and sustainable development in Cambodia,” he was quoted as saying.
The statement concluded: “By the end of 2023, ESCAP and its partners look forward to supporting three new green and sustainable bond listings in Cambodia.”