GCF approves CCFF to boost Cambodia’s green economy

GCF approves CCFF to boost Cambodia’s green economy

The Green Climate Fund (GCF) has approved the Cambodian Climate Financing Facility (CCFF) during its 38th board meeting in Rwanda. This initiative, with concessional funding of $100 million, aims to support Cambodia’s transition towards a green economy.

The CCFF is a $100 million loan facility strategically designed to provide long-term concessional financing to sustainable private sector projects and wholesale funding to financial institutions to scale up Cambodia’s green economy.

The CCFF will be capitalized with concessional funding from the Green Climate Fund, as well as co-financing from the Ministry of Economy and Finance and other co-financers. It will be administered by the Agricultural & Rural Development Bank (ARDB), with Mekong Strategic Capital (MSC) providing independent investment advisory support as the co-executing entity for the CCFF.

The Korea Development Bank will act as the GCF Accredited Entity for the CCFF.

The CCFF in partnership with the ARDB will serve as a direct lender to private sector climate projects, demonstrating the environmental benefits and financial viability of financing climate projects to the wider financial sector.

Additionally, it will collaborate with local financial institutions, providing them with concessional wholesale funding to finance businesses which demonstrate positive climate outcomes.

This dual approach allows the CCFF to mobilize domestic private sector capital, creating a broader systemic impact and shift in focus towards the provision of more climate lending in Cambodia.

Cambodia becomes the first Asian nation to establish a national domestic climate financing vehicle capitalized through the GCF.×280&!2&btvi=1&fsb=1&dtd=232

This investment can be viewed as a strong endorsement from the international climate finance community in Cambodia’s commitment to climate action.

The CCFF’s mission is to support Cambodia’s ambitious climate targets by providing appropriately structured financing to private sector businesses across renewable energy, energy efficiency, sustainable agriculture and forestry, water infrastructure and low-emission transportation sectors.

This milestone would not have been possible without strong support from the Ministry of Environment, Ministry of Economy & Finance, Korean Development Bank, National Bank of Cambodia, Agricultural & Rural Development Bank and United States Agency for International Development (USAID), which provided crucial partnership and technical support.

John McGinley, Managing Partner, Mekong Strategic Capital, said, “We are immensely proud of the successful conceptualization, design, launch and now achieving final Green Climate Fund board approval for the Cambodian Climate Financing Facility (CCFF). This initiative underscores our commitment to catalyzing climate finance in the Mekong Region and beyond. The CCFF’s scalability is evident, with numerous climate-focused investors now seeking co-financing opportunities.”

Eang Sophalleth, Minister of Environment, Royal Government of Cambodia said, “We are very pleased by the GCF’s board approval of the Cambodian Climate Financing Facility (CCFF). This initiative marks a significant step towards fulfilling Cambodia’s climate commitments and fostering sustainable development. The CCFF is aligned with the Royal Government of Cambodia’s climate policies and sustainable development strategy, and represents our collective determination to combat climate change and protect our environment.”×280&!3&btvi=2&fsb=1&dtd=323

He went on to add, “I would like to extend my appreciation to Mekong Strategic Capital and Korea Development Bank for their cooperation in the field of environment… Together, through collaborative efforts, we will build a more clean, green and sustainable future for generations to come.”

On his part, US Ambassador Patrick Murphy said, “The US government supports the Green Climate Fund’s approval of the Cambodia Climate Finance Facility. I am pleased that our USAID experts provided conceptual and other technical expertise to successfully advance this critical initiative.”

Approval of the $100 million initiative is an important milestone in our collective, global efforts to confront the significant threat of climate change.

“The United States remains committed to partnering with Cambodians in tackling climate change and building a sustainable world. By investing in creative initiatives and fostering innovation, we are not only safeguarding Cambodia’s natural heritage but also laying the groundwork for a more resilient and prosperous future. We congratulate all stakeholders involved for achieving this outcome for the Kingdom,” Murphy said.

The Green Climate Fund (GCF) is the world’s largest climate fund mandated to support developing countries in implementing and achieving their Nationally Determined Contributions (NDCs) towards low-emissions, climate-resilient pathways.

Mekong Strategic Capital (MSC) is an investment and advisory firm headquartered in Cambodia and operating across Southeast Asia. Founded in 2014, MSC operates across three core areas such as climate finance, corporate advisory and investment management.

MSC specializes in developing innovative solutions to catalyze climate finance initiatives in the Mekong Region, including identifying, analyzing, and financing leading private sector climate solutions. Our mission is to support the sustainable economic development of our communities by providing expertise, capital and strategic advisory to projects and initiatives that mitigate climate risks and promote resilience.

MSC provides unparalleled insights to international investors seeking exposure to the high-growth economies of the Mekong Region, as well as local emerging corporates and institutions. Our advisory work includes Mergers & Acquisitions, Divestments, Capital Raising for both debt and equity, market entry strategies, debt structuring, and strategic growth advisory.

MSC identifies opportunities and invests in attractive firms and projects in the Mekong Region. We manage Cambodia’s first tech venture capital fund, Smart Axiata Digital Innovation Fund (SADIF), providing innovative tech startups with much-needed seed funding for growth. We also have a demonstrated track record of investing in high-quality growth companies in Cambodia through the Cambodia Stock Exchange.

The Agricultural & Rural Development Bank (ARDB) was established in 1998 and is fully owned by the Royal Government of Cambodia to support the development of SMEs in Cambodia’s rural and agricultural sectors. ARDB is a public enterprise functioning in the form of a state-owned commercial bank and is fully independent in leading and governing the bank’s activities. ARDB is under the technical supervision of the Ministry of Economy and Finance and is regulated by the National Bank of Cambodia.

The Korea Development Bank (KDB) is a national entity that was founded to supply and manage major industrial capital to help develop the economy of the Republic of Korea (RoK). Since its establishment, KDB has been providing financing for the development and promotion of industries, the expansion of social infrastructure development of countries, including that of the RoK, the stabilization of financial markets and the facilitation of sustainable growth. KDB has placed climate change and socially responsible investment as policy issues that are addressed in its annual planning. KDB is a GCF Accredited Entity (AE). khmertimeskh

Leave a Reply

Your email address will not be published. Required fields are marked *