Expanding Sustainable Finance Offerings in Cambodia Through Sustainability-Linked Bonds

The Securities and Exchange Regulator of Cambodia (SERC), in collaboration with the Asian Development Bank (ADB), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), and the Global Green Growth Institute (GGGI), hosted a capacity-building workshop on “Sustainability-Linked Bonds (SLBs)” on July 15, 2025, at the Raffles Hotel Le Royal Phnom Penh.

The workshop aimed to provide participants with knowledge and perspectives on the key characteristics of SLBs, the main steps in their development, and methods for determining Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs). It also offered information on available technical assistance to support the issuance of SLBs.

H.E. Sou Socheat, Director General of the SERC, shared that the regulator is currently developing new guidelines on Sustainability-Linked Bonds to further expand sustainable finance product offerings in Cambodia, recognising the critical role of the securities market in addressing climate and social challenges.

He said:

We are now moving forward to further diversify sustainable financing options in Cambodia. Our current focus is on SLBs—an innovative instrument that links financing costs to the achievement of defined sustainability targets by issuers. This new product will broaden access to sustainable finance for a wide range of sectors and incentivise greater accountability and performance in sustainability.

He added that, in recent years, Cambodia has also introduced a range of sustainable debt instruments to mobilise funding for green and inclusive growth, including green, social, and sustainability bonds, which are now well-established and operational in the market.

Deanna Morris, Economic Affairs Officer at UNESCAP, shared that Cambodia faces a significant sustainable financing gap, with climate mitigation and adaptation finance alone requiring an estimated USD 7.8 billion.

She emphasised that sustainability-linked bonds are a fast-evolving financial tool in the global sustainable finance landscape. Innovative financing mechanisms, such as sustainable and sustainability-linked bonds, are seen as critical to closing the financing gap and mobilising investment from both the public and private sectors.

Morris stated:

SLBs, in particular, offer flexible approaches. Proceeds may be used for general corporate purposes, but the financing terms are linked to the achievement of predefined sustainable performance targets. The structure provides strong incentives for issuers to enhance their environmental and social performance.

She added that several countries in Asia have already taken steps to bring SLBs to market, helping shift capital toward low-carbon and inclusive growth. Cambodia is well-positioned to become the next mover in this region.

Shomi Kim, Country Representative of GGGI, said the Cambodia Sustainable Bond Accelerator (CSBA) Program—a joint effort by the SERC, UNESCAP and GGGI, in collaboration with the CGIF, ADB and GuarantCo—has achieved remarkable progress since its launch, with a USD 140 million sustainable bond project currently underway.

This project encompasses a USD 10 million green bond listed in 2024 by Royal Group Phnom Penh SEZ, and a USD 50 million bond listed by SchneiTec Group for a solar farm in 2025. Kim added that the size of Cambodia’s bond market has also doubled from USD 200 million to more than USD 400 million since the CSBA program began implementation.

She stated:

We are very proud to say that our program, and also the green bond issuance, has significantly contributed to the growth of the bond market in Cambodia. Beyond these very tangible outcomes, the most transformative achievement has been the development of an ecosystem for sustainable financing in Cambodia.

She emphasised that stakeholders in Cambodia’s capital markets are beginning to recognise the importance of sustainable investment—not merely under a Corporate Social Responsibility (CSR) agenda, but as a strategic and high-value financial instrument. Sustainable finance is now becoming mainstreamed into the business models of the private sector. 

“More increasingly, we are also seeing a shift in investor appetite, with more interest directed towards greenhouse sustainable projects, signalling a paradigm shift,” she added.

As of March 2025, two companies—Royal Group Phnom Penh SEZ and SchneiTec Group—have issued green and sustainability bonds on the Cambodia Securities Exchange (CSX). Two other bonds under the CSBA program—from LOLC Cambodia Plc. and Wing Bank—are currently in the pipeline.