The Green Climate Fund (GCF) has given the green light for the Cambodian Climate Financing Facility (CCFF) at its 38th board meeting held in Rwanda. This pivotal move, involving a $100 million concessional funding, is set to propel Cambodia towards a more sustainable and eco-friendly economic framework.
Designed as a $100 million loan facility, the CCFF aims to inject long-term, affordable financing into private sector projects that adhere to sustainable practices, while also extending wholesale funding to financial institutions. This strategic financial infusion is anticipated to significantly scale up Cambodia’s efforts towards cultivating a green economy.
Capital for the CCFF will be sourced from the GCF’s concessional funds, complemented by contributions from the Ministry of Economy and Finance along with other financial partners. The Agricultural & Rural Development Bank (ARDB) is tasked with managing the facility, while Mekong Strategic Capital (MSC) is set to offer independent investment advisory services as a co-executor.
The Korea Development Bank is positioned as the GCF Accredited Entity, overseeing the CCFF’s execution.
With the ARDB at the helm, the CCFF will directly finance private sector initiatives that demonstrate tangible environmental benefits and economic viability, serving as a model for climate financing within the financial sector. It aims to partner with local financial entities, providing them with affordable funding to support businesses that yield positive climate outcomes.
This innovative approach intends to leverage domestic private capital, aiming for a wider systemic change towards more climate-focused lending practices in Cambodia. This initiative marks Cambodia as the first country in Asia to launch a national climate financing mechanism with backing from the GCF, signaling strong international confidence in Cambodia’s commitment to climate initiatives.
The CCFF seeks to bolster Cambodia’s ambitious climate goals by offering well-structured financial support to businesses engaged in renewable energy, energy efficiency, sustainable agriculture, forestry, water infrastructure, and low-emission transportation.
This initiative enjoys robust support from multiple key stakeholders including the Ministry of Environment, Ministry of Economy & Finance, Korean Development Bank, National Bank of Cambodia, ARDB, and the United States Agency for International Development (USAID), which have all played a crucial role in bringing this vision to fruition.
John McGinley of Mekong Strategic Capital expressed immense pride in the CCFF’s conception, development, and approval, emphasizing the facility’s potential to drive climate finance in the Mekong Region and beyond.
Eang Sophalleth, Minister of Environment for the Royal Government of Cambodia, lauded the GCF’s approval as a significant stride towards achieving Cambodia’s climate objectives and fostering sustainable growth, aligning with the government’s climate and development strategies.
US Ambassador Patrick Murphy commended the collaborative effort, highlighting the United States’ commitment to partnering with Cambodia in climate change initiatives and sustainable development. The GCF’s endorsement of the CCFF stands as a crucial milestone in global efforts to address the looming threat of climate change, promising a more resilient and prosperous future for Cambodia and its citizens.
The GCF, recognized as the largest climate fund globally, is dedicated to assisting developing countries in reaching their Nationally Determined Contributions (NDCs) towards climate-resilient, low-emission pathways. Mekong Strategic Capital, known for its expertise in climate finance, corporate advisory, and investment management, plays a significant role in catalyzing climate finance initiatives across Southeast Asia, contributing to the region’s sustainable economic development.
