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Cambodia Securities Exchange rollout of green bonds set to bloom in 2023

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Leading real estate firm Golden Tree was the first company in Cambodia to list with green bonds on January 19, 2023. PHOTO SUPPLIED

Cambodia Securities Exchange rollout of green bonds set to bloom in 2023

With the growing effects of climate change increasingly a major concern globally, balancing economic activities with environmental considerations has never been more urgent.

While Cambodia generates just 0.02 per cent of global greenhouse gas emissions, environmental protection is among the government’s top concerns as the Kingdom is highly vulnerable to the consequences of extreme climate change.

For instance, Cambodia may experience increased severe floods and droughts affecting food production, particularly rice crops.

The Cambodian government approved the National Policy on Green Growth back in 2013, with the goal of transitioning even further towards a low-carbon economy

With the right government policies in place, the capital market can play a significant role in collecting private capital for sustainable investment.

With the stock market in the Kingdom still in its early stages, with a limited number of registered bonds and investors participating, the Cambodia Securities Exchange (CSX) remains dedicated to promoting and growing it.

CSX is committed to encouraging potential companies to consider choosing this new source of financing to diversify their capital.

In February 2022, in order to encourage more companies to enter the capital market, the Cambodian government issued a sub-decree on tax incentives in the securities sector.

Notably, if the capital raised from the publishing were used with the purpose of supporting green development and sustainable development, as well as putting development as a main priority, they may also be subject to extra tax benefits.

In July 2022, the Securities and Exchange Regulator of Cambodia (SERC) – with the support of the Asian Development Bank – issued detailed guidelines for the issuance of green bonds.

Content image - Phnom Penh Post
An aerial view of the VTrust Tower in Phnom Penh’s Khan 7 Makara, where Golden Tree is headquartered. PHOTO SUPPLIED

These assist securities issuers and securities companies in better understanding the process and key considerations for the publishing of green bonds.

Leading real estate firm Golden Tree was the first company in Cambodia to list with green bonds on January 19, 2023.

Green bonds and other sustainable financial instruments are in great demand. The proceeds from green bonds will be used to fund eco-friendly projects and those that sustainably benefit the environment and the economy.

Greening includes renewable energy, sustainable resource use, conservation, environmentally friendly transportation and developing adaptations to climate change.

Employment and income growth in a green economy is driven by public and private investment in economic activities and infrastructure, with assets that minimise carbon emissions and pollution, build energy and resource optimisations, and prevent the degradation of biodiversity and ecosystems.

Green bonds refer to the issuance of bonds whereby the issuer can choose one of four different frameworks, including the European Union’s NextGenerationEU Green Bond framework, the Green Bond Principles, the ASEAN Green Bonds Standard and the Climate Bonds Initiative.

Each framework defines the types of and conditions for green businesses that may be listed on the CSX, with compliance with Environmental, Social and Corporate Governance (ESG).

This notable new accomplishment allows CSX to join and support global efforts in combating climate change as well as contribute to the sustainable development of the national economy.

As a result, prospective companies can mobilise capital from the public in the form of green bonds with institutional investors who can begin to incorporate ESG aspects into their investment decisions to assist Cambodia’s transition to a low-carbon and climate-resilient economy.

Prepared by: Cambodia Securities Exchange Listing and Disclosure Dept.
Email: listing@csx.com.kh.
Tel: 023 95 88 88 / 023 95 88 85.


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