Phnom Penh, Cambodia – 27 April 2023 – The Cambodian Ministry of Economy and Finance (MEF), the Global Green Growth Institute (GGGI) Cambodia and the United Nations Economic and Social Commission for Asia and Pacific (UN ESCAP) organized a validation workshop on the Sovereign Thematic Bond issuance Policy Paper. This landmark workshop was presided by H.E. Pen Thirong, Under-Secretary of State, Ministry of Economy and Finance, Ms. Shomi Kim, GGGI Cambodia Country Representative, and Deanna Morris, Economic Affairs Officer, UN ESCAP.
The vital workshop was conducted to validate the Thematic Bond Policy Paper which entails steps involved in issuing sovereign thematic bonds, the status of the Cambodian bond market, the potentials for a sovereign thematic bond issuance, and the possible benefits, drawbacks, and challenges. The policy paper also includes sustainable financing framework which is required prior to the issuance of sovereign thematic bond.
In his opening remark, H.E. Pen Thirong, Under-Secretary of State, Ministry of Economy, said, ‘’The Ministry of Economy and Finance is developing Policy Framework on the Development of Government Securities (2023-2028) which will provide comprehensive and solid ground for Cambodia to issue sovereign thematic bond.’’ H.E. Pen Thirong continued that the workshop today will contribute to the mentioned policy and inputs from this validation workshop will be used to improve and reflect on the existing draft.
Began with a welcome remark by Shomi Kim, GGGI Cambodia Country Representative, and opening remarks from the Ministry of Economy and Finance, the workshop went on to engage with all stakeholders through group discussion on important topics such as the thematic bonds context in Cambodia, key stages in issuing thematic bonds, roles and responsibilities. The workshop concluded with a final group discussion which formulated recommendations to be proposed for the Royal Government of Cambodia (RGC) for the next step to progress sovereign thematic issuance in Cambodia.
Shomi Kim, GGGI Cambodia Country Representative, said, ‘’Looking at the country context of Cambodia, we strongly believe that Cambodia has a good outlook for sustainable financing market growth at the national level. There is a growing interest and policy support for sustainable investment with a stable sovereign rating. We also believe this is a catalytic tool to attract green investment to meet the carbon neutrality target by 2050 that the Royal Government of Cambodia has set.
There is a growing movement towards aligning finance with sustainable development. Within less than a decade, the sustainable debt issuance figure was identified to have grown from USD 28 billion in 2013 to USD 1.6 Trillion in 2021. According to Shomi Kim, GGGI Cambodia Country Representative, this financial instrument can accelerate green growth through impact investments.
The workshop was joined by high-level representatives from the Ministry of Economy and Finance, the National Bank of Cambodia, the Securities and Exchange Regulator of Cambodia (SERC), the Cambodia Stock Exchange, Ministry of Environment, and representatives from line ministries and private banks.
The validated Sovereign Thematic Bond Policy Paper, developed with technical support from GGGI and UNESCAP, will be integrated into the Policy Framework on the Development of Government Securities (2023-2028) which is expected to be endorsed by the Ministry of Economy and Finance by the end of the year 2023.