Cambodia Sustainable Bond Accelerator Program Selects Three Local Companies For 2024 Phase
The Cambodia Sustainable Bond Accelerator (CSBA) Program has selected three private-sector bond issuers to receive comprehensive support for their inaugural green, social, and sustainability bond issuances in 2024. These issuances will support projects with significant environmental and social benefits in Cambodia.
According to a press release issued by the Securities and Exchange Regulator of Cambodia (SERC), the companies selected for the CSBA program are ScheneiTech (an energy company) and two financial companies – LOLC Plc and Wing Bank – with a total aggregate investment requirement of USD $140 million for projects between 2024 and 2025.
The program, which is now in its second phase, is a joint effort by the SERC, Global Green Growth Institute (GGGI), and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in collaboration with the Credit Guarantee and Investment Facility (CGIF) – a trust fund of the Asian Development Bank (ADB) – and GuarantCo, part of the Private Infrastructure Development Group.
Companies Selected For The Cambodia Sustainable Bond Accelerator (CSBA) Program 2024
The more detailed information on the companies selected for the program are as follows:
- LOLC (Cambodia) Plc
- Issuance size: USD $50 million sustainability bond
- Proceeds Allocation: USD $10 million for green projects and USD $40 million for social projects
- Target Issuance: Q4 2024
- SCHNEITEC Dynamic Co., Ltd
- Issuance size: USD $50 million Green Project Bond (Project Sunflower).
- Proceeds Allocation: Funding a solar photovoltaic power plant.
- Target Issuance: Between Q4 2024 and Q1 2025.
- Wing Bank (Cambodia) Plc
- Issuance size: USD $40 million social bond.
- Proceeds Allocation: Loans for women entrepreneurs, SMEs, and low-income families.
- Target Issuance: Q4 2024.
Bond issuers in emerging and frontier markets often face significant barriers. Those issuing thematic bonds (green, social, and sustainability bonds) typically face additional constraints such as limited issuer awareness and capacity, as well as higher issuance costs.
The press release states that the CSBA program aims to mitigate these challenges by providing technical assistance, financial support (co-financing for second-party opinion reviews) and enhanced investment support to the selected issuers
H.E. Sou Socheat, Director-General of the SERC, has said the Royal Government of Cambodia is prioritising climate mitigation and adaptation in its national development strategy, requiring an estimated USD $7.8 billion in funding, according to the updated Nationally Determined Contribution (NDC).
He emphasised:
Thematic bonds offer a crucial mechanism to bridge this financing gap, mobilising investments for public and private sector in green and sustainable initiatives. Also, these bonds will contribute to the greenhouse gas emissions reduction, contribute to the NDC and lead to more green job creation.
Launched in February 2023, the 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.
This article was adapted from a supplied press release.