Green bonds refer to a debt securities issued by entities whereby the proceeds are used to finance or refinance projects or assets that have a positive impact on the environment and/or climate.

Green bonds are commonly used to finance the following types of projects:

- Energy efficiency projects

- Renewable energy projects

- Pollution prevention and management projects

- Natural resources and land management projects

- Clean transportation projects

- Wastewater and water management projects

- Green building projects

Example: ​Development of wind or solar power generation project, purchase of land for construction or equipment to support wind or solar power generation, development of electric vehicle manufacturing and so on.

History of Green Bonds

In 2007, the UN Intergovernmental Panel for Climate Change published a report that linked global warming and human activity. This prompted Swedish pension funds to consider financing projects that contributed positively to the environment. In response to increasing demand, in 2008 the World Bank issued its first green bond. Since then, there has been increasing demand for green bonds and for different countries to consider issuing them.

Advantages of Green Bonds

Green bonds provide huge benefits to the financial market, providing benefits to the issuer and investors, as well as the entire financial ecosystem, while supporting the achievement of sustainable development goals. The presence of green bonds contributes to:

- The implementation of high standards for climate integrity.

- Increased financial flows for the development of low-carbon economies.

- Ensured prosperity for future generations. 

The Difference between Green Bonds and Conventional Bonds (Regular Bonds)

There isn’t much difference between green bonds and conventional bonds, due to both having similar risks and returns. The green label specifies that the proceeds will be used for environmentally related and climate mitigation projects. The added feature of a green bond is its higher credit quality and diversification benefits. Green bonds are fundamentally the same as conventional bonds​. They represent a loan agreement between bond issuers (state, corporation or enterprise) and an investor, and are used to finance a project. Bondholders will receive full payment from issuers (principal and interest) after maturity. The key differentiator between a green bond and a conventional bond is the underlying project that is financed with the proceeds. Green bonds are issued exclusively to finance projects that positively impact the environment. On the other hand, conventional bonds are primarily issued to finance general projects, general working capital purposes or refinance existing debt.

Standards that Golden Tree Green Bonds must meet 

According to the guidelines No. 003/22 SERC/KNN dated on October 24, 2022, on the issuance of green bonds, social bonds and sustainability bonds, any entity who proposes to issue green, social, or sustainability bonds shall comply with the Prakas on Public Offering of Debt Securities in the case of a public offering of debt securities and the Prakas on Debt Securities Offering to Qualified Investors in the case of debt securities offering to qualified investors, as well as regulations in force in the Kingdom of Cambodia, including the Detailed Guidance for Issuing Green Bond in the Kingdom of Cambodia, ASEAN Green Bond Standards, ASEAN Social Bond Standards and ASEAN Sustainability Bond Standards and other international standards related to green, social, or sustainability bonds in force. In the case of Golden Tree, the company’s framework is aligned with both Green Bond Principles 2021 developed by the International Capital Markets Association (ICMA) and ASEAN Green Bond Standards developed by the ASEAN Capital Markets Forum (ACMF). This Framework is based on the following core elements:

1. Use of proceeds,

2. Process for project evaluation and selection,

3. Management of proceeds, 

4. Allocation and Impact Reporting.

Golden Tree’s green bond framework received consultation from DNV GL (Thailand) Co., Ltd. It should also be noted that Golden​​ Tree was officially listed on the Cambodia Securities Exchange as the first issuer of green bonds in Cambodia on January 19, 2023. Golden Tree is one of the leading real estate companies in Cambodia, focusing on office building rental services, property management and real estate consulting services. Golden Tree has issued 60,721 bonds in the amount of 6,072,100,000 Riels (approximately 1,468,100 USD) at the rate of 7% annually.


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- Puthik Moulbath No.94 on “Benefits of Green Bonds” issued in 2023

Prepared by:     Securities and Exchange Regulator of Cambodia

Securities Issuance Supervision Department

E-mail: [email protected]

Phone: 023 885611