Unlocking Cambodia’s Sustainable Finance: From Green Bonds to Climate Investment Pathways
Experts from the UN Economic and Social Commission for Asia-Pacific (ESCAP), Securities and Exchange Regulator of Cambodia (SERC) and Global Green Growth Institute (GGGI) presented on unlocking key climate finance pathways for Cambodia at a workshop held at the Non-Bank Financial Services Authority (FSA) building on September 15, 2025.
The workshop introduced Phase III of the ‘Cambodia Sustainable Bond Accelerator’ (CSBA) program, shared findings from a joint research report conducted by the SERC and ESCAP outlining climate financing opportunities and priority policy reforms, and raised awareness on use-of-proceeds bonds and sustainability-linked bonds (SLBs).
Major Investment Needed for Cambodia to Achieve Climate Goals by 2035
According to Cambodia’s third Nationally Determined Contribution (NDC 3.0), the country has set an ambitious target to cut greenhouse gas emissions by up to 55 per cent by 2035, requiring an estimated USD 32.2 billion in investment between 2026–2035—up from the estimated USD 7.8 billion investment from 2020–2025.
Varabott Ho, Sustainable Finance Expert at ESCAP/GGGI, underlined how this revised investment need marks a sharp increase from NDC 2.0, with 70 per cent of financing required for climate mitigation, and 30 per cent for adaptation.
“This is an urgent need to innovate, to find new sources of funding,” he said, pointing to use-of-proceeds bonds and KPI-linked bonds (SLBs) as potential solutions.
Nathalie Andre, Country Representative of GGGI, stated that about USD 22 billion of this investment amount is expected to come from international assistance.
Deana Morris, Economic Affairs Officer at ESCAP, stressed that an investment scale-up is critical to Cambodia’s achievement of its climate targets.
“This is a huge amount of money that we need to invest in Cambodia’s climate change and resilience over the next 10 years to achieve the government’s targets,” she stressed, further adding that while sustainable bond issuances cannot cover all sectors, they do at least represent one of the innovative financing opportunities.
Explaining Green, Social & Sustainable (GSS+) Bonds in Cambodia
Use-of-Proceeds Bonds
Firstly developed in Europe, use-of-proceeds bonds remain new to Cambodia. Under this model, the investment focus is predetermined.
“We make a plan identifying the types of projects—such as renewable energy or energy efficiency—and then create a business plan to show investors that this is a bankable investment,” said Varabott Ho.
Sustainability-Linked Bonds (SLBs)
SLBs or KPI (Key Performance Indicator) bonds—also referred to as sustainability-linked or performance bonds—are designed for general-purpose investment. Unlike use-of-proceeds bonds, KPI bonds are tied to a company’s, or institution’s, overall strategy and long-term sustainability goals.
These bonds are linked to SPTs (Sustainability Performance Targets) and KPIs, such as carbon emission reductions. The bond’s interest rate may vary depending on whether the issuer meets or misses the agreed KPI and SPT targets.
Varabott explained that while use-of-proceeds bonds are project-specific, KPI bonds reflect broader strategic ambitions:
The business plan for KPI bonds is based on your strategy—what kind of goals you set for the next 10 years, and how ambitious they are in reducing carbon emissions. The interest rate is linked to how well you achieve those targets.
The Cambodia Sustainable Bond Accelerator (CSBA) Program
Launched by SERC and ESCAP, in collaboration with CGCC, CGIF, and GuarantCo, the CSBA program has already supported two issuances in Cambodia—a USD 10 million green bond by Royal Group Phnom Penh SEZ and a USD 50 million bond by Schneitech Dynamic—totaling USD 60 million.
According to Nathalie Andre, the program has built a pipeline worth over USD 140 million and helped Cambodia’s domestic bond market more than double in size, now exceeding USD 400 million across thematic and plain bonds.
She emphasised the strategic role of thematic bonds, including green bonds for renewable energy, energy efficiency, green buildings, and clean transport; sustainability bonds that combine green and social projects; and sustainability-linked bonds that tie financing costs to measurable targets.
“These instruments expand financing options for climate and social projects, build investor confidence, and attract international capital aligned with global standards such as ICMA, CIBM, and ASEAN,” she said.
Andre also noted growing recognition among local stakeholders that sustainable finance is more than corporate social responsibility (CSR) and rather a strategic investment tool. She highlighted the emergence of an ecosystem of regulators, issuers, investors, and intermediaries, supported by enabling regulations and guidelines from the SERC, including bond guidelines and upcoming SLB guidelines.
Launch of Report on Climate Finance Pathways in Cambodia
To provide further guidance, the SERC and ESCAP have produced a new report titled ‘Building Bankable Green Project Pipelines in the Non-Infrastructure Sectors of Cambodia’. The report offers an extensive analysis of the country’s sustainable finance landscape, identifying investment opportunities, policy barriers, and investor priorities.
It also highlights opportunities in priority sectors, outlines necessary policy reforms, and recommends practical measures to make Cambodian projects more attractive to investors.
