Cambodia has taken a step toward climate-resilient development by issuing its first green bond, positioning itself alongside other developing economies which are striving to close persistent financing gaps through sustainable debt markets.
This development was highlighted in a new flagship report by the UN Economic and Social Commission for Asia and the Pacific (ESCAP), launched on June 30 at the Fourth International Conference on Financing for Development in Seville, Spain.
The report, titled “A Call to Action: Developing Sustainable Capital Markets, Financing Energy Transitions and Building Project Pipelines”, outlines over 40 actionable strategies to help countries in Asia and the Pacific address critical funding shortfalls that threaten progress on the Sustainable Development Goals (SDGs).
With developing nations globally facing an annual financing gap of between $2.5 trillion and $4 trillion, Cambodia’s move into the green bond market marks a timely and significant shift.
“Between 2023 and 2024, Cambodia — along with Mongolia and Tajikistan — issued its first green, social, sustainability or sustainability-linked (GSS+) bond,” according to the report.
These instruments are designed to attract investment aligned with climate and development goals, such as renewable energy, environmental conservation and sustainable infrastructure.
While the issuance marks progress, the report stresses that the region’s overall debt capital markets remain shallow and unevenly developed.
Many countries, including Cambodia, still grapple with limited market liquidity, low credit ratings and inadequate regulatory frameworks.
The development of GSS+ bonds in such contexts, ESCAP noted, requires coordinated policy support, investor confidence and a strong pipeline of viable green projects.
“Nowhere is this challenge – and opportunity – more urgent than in Asia and the Pacific,” said Armida Salsiah Alisjahbana, UN under-secretary-general and executive secretary of ESCAP.
“This is our chance to build a more resilient, equitable and sustainable economy for all. Unless Asia and the Pacific can lead boldly, the global transition will fall short of expectations,” she added.
The ESCAP report also highlighted long-standing weaknesses in public finance across the region, where tax structures often remain inefficient and private financing fails to reach high-impact sectors such as clean energy or healthcare.
For least developed countries like Cambodia, the report emphasised the need for multilateral development banks and partners to provide technical assistance, act as anchor investors and support the issuance of sovereign sustainable bonds.
The report proposes a range of strategies tailored for developing economies, including strengthening regulatory frameworks, incentivising green investment and fostering local talent to support the growing sustainable finance ecosystem.
It also called on governments to align their Nationally Determined Contributions (NDCs) with robust green project pipelines to attract long-term finance.
“This report serves as an important guide for governments and regulators in expanding access to financing aimed at sustainable development,” said Faizidin Qakhkhorzoda, Minister of Finance of Tajikistan, during the report launch.
He stressed the importance of stronger regulations and innovative instruments to meet national priorities.
Cambodia’s green bond issuance, while modest in scale, is emblematic of broader shifts across Southeast Asia as governments seek new approaches to fund their climate goals amid constrained budgets and rising debt levels.
The ESCAP report underscores that achieving the SDGs will depend not just on raising more capital, but on aligning it strategically with inclusive and sustainable national development.
As Cambodia looks ahead, the challenge will be to deepen its capital market, improve project readiness and ensure that sustainable finance becomes a cornerstone of its development strategy — not a one-off event.
“Closing the financing gap in sustainable development is a question of mobilising more capital and of ensuring that it is well-aligned and accessible and deployed in ways that respond to national priorities and structural constraints,” said Hamza Ali Malik, director of ESCAP’s Macroeconomic Policy and Financing for Development Division, in the foreword to the report.
