In September 2022, the Royal Government of Cambodia issued its first sovereign bond of 100 billion riels (approximately $USD 24.3 million) to raise funds for national development. The government also has plans to issue a $200 million sovereign bond in the future.
The Royal Government of Cambodia is keen on exploring thematic bond issuance to support climate adaptation and mitigation goals, attract investments, and create green jobs. The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), the United Nations Development Program (UNDP), and the Global Green Growth Institute (GGGI), at the request of the Ministry of Economy and Finance (MEF), are assisting the government in building institutional capacity in issuing thematic sovereign bonds.
A collaborative effort between ESCAP, GGGI, UNDP and MEF is underway to host the comprehensive capacity-building training program. This initiative aims to empower MEF and its stakeholders with the knowledge and skills to excel in thematic bond issuance and sustainable financing. The training series spans four days for four stages, and each is dedicated to a specific stage for one day full of the thematic bond issuance process.
The Four Main Topics Covered in the Training Series are as follows:
Stage 1 - Feasibility: This first stage focuses on evaluating financial and sustainability strategies, assessing institutional capacity, engaging with relevant government agencies or ministries, and establishing the groundwork for thematic bonds. Participants delve into feasibility analysis, ensuring the alignment of bonds with existing debt issuance programs and estimating the bond size and tenor.
Stage 2 - Pre-Issuance: The second stage emphasizes the development of a Sustainable Financing Framework, alignment with international standards, engagement of external reviewers and advisors, investor outreach, risk management, exchange listing, and credit rating assessments.
Stage 3 - Issuance: In this third stage, participants learn to announce bond issues, create marketing strategies, set pricing targets, understand legal aspects, and finalize bond terms.
Stage 4 - Post Issuance and Project Implementation: The final stage focuses on project evaluation and selection, allocation of bond proceeds, monitoring project implementation, and comprehensive reporting, including impact assessment and external verification.
This Stage 2 training aims to provide additional general concepts on thematic bonds and deep dive into reviewing the draft Sustainable Finance Framework and its key features, addressing stakeholders’ questions regarding the proposed draft, and defining the next steps and timelines. They will involve various MEF stakeholders, particularly the technical task force members, who will play a pivotal role in driving this initiative and supporting the engagement of other ministries within the Steering Task Force for future thematic bond issuance.