USAID Green Invest Asia formalizes green finance work with Association of Banks in Cambodia
PHNOM PENH, July 31, 2019 – USAID Green Invest Asia signed a memorandum with the Association of Banks in Cambodia to support the creation and national roll-out of risk management and sustainable finance principles, the latest step in a more than three-year green finance journey for the Southeast Asian nation.
“The cost of inaction is much greater than the cost of undertaking such systemic change in the banking sector,” said Dr. Sang Lee, the U.S. Agency for International Development’s (USAID) director of its Food Security and Environment Office in Cambodia, at the July 31st signing ceremony at the Rosewood Hotel. The United Nations has projected that the fallout from climate change in Cambodia could decrease national GDP by almost 10 percent in 2050.
Lee added that the country’s “ground-up sector-wide” approach through the banking association’s 53 member banks helps ensure sustainable finance moves beyond principles into practice. She acknowledged the “days of government-led development initiatives are giving way to market-driven solutions,” a nod to the power of the private sector to alleviate poverty.
Dr. Channy Inn, the Association of Banks in Cambodia’s chairman, noted the association’s intention to transform into a “leader in sustainable finance in the Mekong region,” a vision echoed by the Ministry of Environment and National Bank of Cambodia.
In 2017, DBS (previously the Development Bank of Singapore) estimated a more than 10-fold increase in private sector investment is needed, on top of public funds, to finance adequately the 2030 Sustainable Development Goals in the Association of Southeast Asian Nations (ASEAN).
Fully operational since 2018, USAID Green Invest Asia is the U.S. government’s flagship climate finance initiative focused on sustainable land use in Southeast Asia, which is implemented by the international NGO Pact, in partnership with the Phnom Penh-based investment management and financial advisory services firm, Mekong Strategic Partners. The initiative is helping agriculture and forestry businesses in Southeast Asia improve their sustainable commodity production, manage environmental risks, and connect with investors seeking environmentally and socially-friendly profitable land use businesses.
In Cambodia, USAID Green Invest Asia is supporting companies’ readiness to secure finance for the sustainable production of cashews, charcoal (made from coconut waste and recycled wood) and teak. For more information on how to qualify for public sector investment support, visit www.greeninvestasia.com.
Background on Cambodia Sustainable Finance Initiative:
The Cambodian Sustainable Finance Initiative was founded and established with USAID support in 2015, and carried out by Mekong Strategic Partners, Pact, and Wildlife Conservation Society. In September 2016, the Association of Banks in Cambodia, the Ministry of Environment, and the National Bank of Cambodia publicly committed to the development of sustainable finance principles to guide the Cambodian banking sector toward greater sustainability, and create safeguards that manage and mitigate negative social and environmental impacts attributed to banking practices. Currently supported by USAID Green Invest Asia, International Finance Corporation, and the French Development Agency, the initiative has regularly been highlighted for its innovation.
The Association of Banks in Cambodia, the Ministry of Environment, and the National Bank of Cambodia reaffirmed their collaboration and commitment on July 31, 2019.