$100 Million Finance Launched for Green Investment

PHNOM PENH – A climate finance facility has been launched to expand private-sector investment in renewable energy, sustainable agriculture, water infrastructure and other low-carbon projects.

Organizers say it is Asia’s first national climate lending facility backed by the Green Climate Fund (GCF).

The Cambodia Climate Finance Facility (CCFF) was launched in Phnom Penh on June 17 by the Government, the Agricultural and Rural Development Bank (ARDB) and development partners.

The facility will provide concessional green loans directly to Cambodian businesses and wholesale financing to local financial institutions to support projects in renewable energy, energy efficiency, sustainable agriculture and forestry, water infrastructure and low-emission transport.

Kao Thach, delegate of the Royal Government in charge and chief executive officer of ARDB, said the facility represents a significant step toward mobilizing climate finance through the financial sector.

“With up to $32 billion in climate investment needed to meet Cambodia’s NDC 3.0 targets, the CCFF is a clear signal that local financial institutions have a critical role to play alongside the government in mobilizing that capital and that ARDB is ready to lead that effort,” he said.

According to ARDB, the facility is capitalised with an initial $100 million from the GCF and development partners. It is co-managed by ARDB and Mekong Strategic Capital (MSC), while the Korea Development Bank serves as the GCF-accredited entity.

Officials said the programme is identified in Cambodia’s Nationally Determined Contribution (NDC 3.0) as a key mechanism for mobilizing private-sector climate finance. The country’s climate roadmap estimates that $22.5 billion of the $32 billion will have to come from international and private sources.

John McGinley, managing partner of MSC, said the facility was designed to connect Cambodian businesses and financial institutions with global climate finance and support the country’s transition away from fossil fuel dependence.

He said the program arrives at a critical time as businesses face rising energy costs and climate-related challenges, adding that the facility could grow to $1 billion by 2035 if successfully implemented.

Hang Suk Choi, general manager of KDB, said approval of the facility demonstrates Cambodia’s growing capacity to access international climate finance and build long-term climate financing systems.

He described the CCFF as more than a funding mechanism, saying it could serve as a model for how developing countries access global climate finance while strengthening domestic institutions.

Australian Ambassador to Cambodia Derek Yip said Australia supported the establishment of the facility because climate pressures and energy disruptions are increasingly affecting agriculture, businesses and communities across the region.

He said the program would help strengthen energy resilience, promote sustainable agriculture and food security, and support Cambodia’s transition toward a climate-resilient economy.

The launch also coincides with the implementation of Cambodia’s Sustainable Finance Taxonomy, a framework intended to guide environmentally sustainable investment and lending practices across the financial sector.

Until now, businesses seeking to invest in climate-related projects largely relied on commercial financing, which often carries higher costs and shorter repayment periods. 

Officials say the CCFF is expected to improve access to long-term concessional financing and encourage greater private-sector participation in Cambodia’s green transition.