The Kingdom’s first green bonds were issued by Royal Group Phnom Penh SEZ in a special ceremony at the Cambodia Securities Exchange (CSX) on June 28. Supplied
The Royal Group Phnom Penh SEZ (RGPPSEZ) has announced the first trench of 41 billion riel (almost $10 million) in green bonds.
The bonds, which are guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank (ADB), represent a significant step in green financing in the kingdom. A second issue of a similar amount is set to follow.
“The issuance will support green projects in Cambodia, including a wastewater treatment plant and sustainable infrastructure. These projects will directly contribute to greenhouse gas emission reductions and help Cambodia achieve its nationally determined contributions (NDCs),” said a June 28 Royal Group press release.
“Cambodia is vulnerable to climate change and needs more investors to invest in sustainable development with a long-term perspective. Green bonds offer the opportunity to earn a return on their investment while supporting environmental causes. Issuers benefit from accessing capital for sustainable projects and it also indicates their commitment to contributing to sustainable development,” said Sou Socheat, director-general of the Securities Exchange Regulator of Cambodia (SERC)
According to the release, the issuance is the result of the Cambodia Sustainable Bond Accelerator Program, an initiative built on a partnership between SERC, the Global Green Growth Institute (GGGI) and the UN Economic and Social Commission for Asia and the Pacific (ESCAP) in collaboration with the CGIF and GuarantCo, part of the Private Infrastructure Development Group.
RGPPSEZ was selected to receive support through the programme last year.
“The successful issuance and listing of RGPPSEZ's green bonds exemplify our collective commitment to addressing climate change and advancing sustainable development. This milestone highlights the vital role of innovative financing solutions in mobilising resources for a greener, more resilient future. This has been a great journey to promote sustainable financing through the Sustainable Bond Accelerator Program which is also co-funded by the government of Luxembourg through its Global Trust Fund on Sustainable Finance Instruments (GTF),” explained Shomi Kim, country representative of GGGI.
“The sustainable bond programme shows how cooperation can advance the financing of the SDGs and climate action in the region. This initiative, among other sustainable finance efforts supported by ESCAP in Cambodia, is pivotal in creating a sustainable capital market and a supportive financial ecosystem. We are proud of this collaborative achievement, which sets the stage for a sustainable and prosperous Cambodian economy” added Hamza Ali Malik, director of macroeconomic policy and financing for development at ESCAP.
Hongwei Wang, GCIF CEO, expressed his organisation’s pride at guaranteeing the first green bonds to be issued in the Kingdom.
“It not only signifies a major milestone for the RGPPSEZ but also sets a precedent for sustainable development. CGIF’s support will enable Royal Group to advance its green infrastructure, promoting environmentally friendly initiatives within Special Economic Zones,” he said.
“This bond sets a new standard for other issuers in Cambodia, demonstrating the viability and the benefits of green financing,” he added.
Nishant Kumar, Asia managing director for GuarantCo – which mobilises private sector local currency investment for infrastructure projects and the development of financial markets in lower income countries across Africa and Asia – noted that his firm has been a strong supporter of sustainable finance for infrastructure both in Cambodia and the region for many years.
“We are glad to build on broader momentum and pave the way for a future where more Cambodian companies can access green and sustainable capital,” he said.
Uematsu Hiroshi, CEO of Royal Group Phnom Penh SEZ, addressed the official bond listing ceremony, which took place today at the Cambodia Securities Exchange (CSX).
‘’This listing is an important step in our company’s involvement in helping Cambodia achieve its climate targets and helps to address the gap between investors and investment in sustainable development. It represents a compelling opportunity for investors seeking to align their financial goals with positive environmental impacts,” he explained.
According to the release, sustainable, thematic, and green bonds offer Cambodia a three-pronged approach to balancing environmental and economic development. These instruments not only fund critical projects but also attract investment capital fueled by the global sustainability movement, all while contributing to the broader development of Cambodia's financial market.
Launched in February 2023, the Cambodia Sustainable Bond Accelerator Program aims to accelerate the development of Cambodia’s green and sustainable bond market and associated policies, tools, and mechanisms to facilitate financing towards climate mitigation and adaptation initiatives.
