Cambodia – Building a Sustainable Finance Ecosystem from the Ground Up
Cambodia is developing its sustainable finance market by leveraging capital markets to mobilize climate-aligned investment. With an estimated USD 32.2 billion needed to meet national development targets by 2035, the country is strengthening regulatory frameworks, building issuer capacity, and fostering partnerships to unlock green finance.
The Challenge
Cambodia faces significant financing needs, while its capital market remains at an early stage. As the primary regulatory body for the capital markets, the Securities and Exchange Regulator of Cambodia (SERC) faced the dual challenge of promoting sustainable finance in an emerging market context with limited issuer capacity and high issuance costs, and low investor familiarity with sustainable finance instruments. At the same time, Cambodia's financial sector required targeted frameworks and capacity-building to align with international standards and attract investor interest in green investments.
Strategic Approach
Cambodian authorities adopted a coordinated and partnership-based approach to develop the sustainable finance ecosystem. In 2022, SERC introduced Green, Social, and Sustainability (GSS) Bond Guidelines aligned with ASEAN standards, establishing a clear framework for sustainable bond issuance and strengthening market credibility through alignment with international practices.
This regulatory foundation was complemented by the Cambodia Sustainable Bond Accelerator Program, implemented with ADB, UNESCAP, and GGGI. The program combines technical assistance, financial support to reduce issuance costs, and post-issuance support to help issuers overcome capacity and market barriers. Through targeted guidance and capacity-building activities, SERC also worked to improve issuer readiness and strengthen market understanding of sustainable finance instruments.
SERC also strengthened market capacity through targeted guidance and introduced ESG disclosure requirements in 2024 through a gradual implementation approach, beginning on a voluntary basis and expected to become mandatory from May 2026 for most listed companies (excluding Growth Board issuers, which are subject to lighter listing requirements). . The framework is intended to improve transparency, comparability, and ESG-related market disclosures over time.
In parallel, the National Bank of Cambodia launched the Sustainable Finance Taxonomy in April 2026, developed with IFC, to define sustainable activities, guide lending, and reduce greenwashing risks. The taxonomy focuses on key sectors such as energy, transport, and construction and aligns with the ASEAN Taxonomy for Sustainable Finance.
Outcomes and Impact
Cambodia’s sustainable finance market is gaining momentum. The domestic bond market doubled between 2023 and 2025, exceeding USD 400 million. The Sustainable Bond Accelerator has supported over USD 60 million in green bond issuances, with a pipeline above USD 100 million. Transactions such as the SchneiTec green project bond for a 60MW solar plant have demonstrated innovation and attracted international recognition.
While still modest in scale, these developments are channeling capital into climate-aligned sectors and helping build investor confidence in sustainable finance instruments.
Lessons Learned
Cambodia’s experience highlights the importance of regulatory leadership in developing sustainable finance markets at an early stage. Through a proactive and partnership-based approach, SERC helped establish the regulatory foundations for sustainable finance by introducing aligned bond guidelines, strengthening disclosure practices, and supporting issuer capacity building.
The case demonstrates how targeted technical assistance,financial support mechanisms, and international alignmenta can help mobilize green investment and strengthen sustainable finance markets, even in smaller and less mature financial systems.
Key Links and Documents: