Publicly Listed Phnom Penh Special Economic Zone To Issue $15 Million Green Bonds
In a statement released to the Cambodia Securities Exchange (CSX) in mid November 2023, the Royal Group-owned Phnom Penh SEZ Plc (PPSP) announced that its Board of Directors has approved a resolution for the issuance of green bonds to qualified investors, amounting up to USD $15 million.
The approval from the PPSP Board of Directors (BOD) comes nearly six months after the initial announcement of the green bond listing in June 2023 by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and other partners under the Cambodia Sustainable Bond Accelerator 2023.
PPSP Green Bond Details And Regulatory Process
The USD $15 million bond will have a tenor of five years, as approved by the BOD during a meeting on November 10, 2023, and bond proceeds will be used for the development of 'green' infrastructure.
The issuance of the green bonds is still subject to review and approval by relevant parties involved in the process of guaranteeing the bond. The PPSP has stated that it is in the process of requesting approval from the Securities and Exchange Regulator of Cambodia (SERC) and the Cambodia Securities Exchange (CSX), in accordance with applicable laws and regulations. The approval process is expected to be completed by early 2024.
The PPSP had initially considered starting the bond volume in the USD $10 million range, with a maximum ceiling of USD $20 million. They also suggested the bond will be released as late as Q3 2024.
“As the zone developer and operator, we believe this initiative will be particularly relevant to us by promoting growth in the (bond) capital market in Cambodia while providing us with opportunities to engage with international investors,” the statement read.
Developing Green Infrastructure
Proceeds from the bond will be used for expanding infrastructure, including the construction of green buildings and other green assets, within the Royal Group Kandal SEZ.
Bond proceeds will also finance sustainable infrastructure projects that aim to reduce the country's environmental impact. Additionally, the bond issuance will help the company reduce its cost of capital by providing a lower-cost alternative to bank borrowing in the current environment of rising interest rates.
In addition to the PPSP, Royal Group also wholly owns the Royal Group Poipet SEZ located in Banteay Meanchey Province by the Cambodia-Thai Border. CAMGSM Plc. (Cellcard), another Royal Group-owned entity, will also begin offering its USD $20 million sustainability bond, with an official bond listing ceremony scheduled for November 24, 2023 at the CSX.
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