Phnom Penh, Cambodia, October 17, 2024—To help address climate change impacts and foster a sustainable financial ecosystem, IFC is collaborating with the Association of Banks in Cambodia (ABC) to boost the capacity of local financial institutions in the climate finance space.
Cambodia will need an additional $36 billion in investments from both private and public sectors between 2023 and 2050 to achieve its climate goal of carbon neutrality by 2050, according to the World Bank-IFC Cambodia Country Climate and Development Report (CCDR).
Addressing the need to unlock capital for climate-friendly projects, a training program was organized on October 17 to equip over a hundred bankers with knowledge and tools they need to drive sustainable finance initiatives. The event was part of a wider cooperation between IFC and National Bank of Cambodia (NBC) to boost green finance through the development of capital markets in the country. Facilitated by IFC experts and key stakeholders, NBC and Securities and Exchange Regulator of Cambodia, the sessions covered a range of topics—from Sustainable Finance Taxonomy and Environmental and Social Risk Management System, which are works in progress, to the latest trends and opportunities in sustainable finance.
“The importance of sustainable finance cannot be overstated. It is not just about mitigating risks associated with climate change, but also about seizing opportunities that come with the green transition,” said Towfiqua Hoque, the newly appointed IFC Resident Representative for Cambodia. “By integrating environmental, social, and governance considerations into the financial systems, we can create a more resilient and inclusive economy.”
In her new role, Hoque will spearhead IFC’s initiatives to bolster the country’s financial sector, advance renewable energy, promote green transport and logistics infrastructure, and expand climate finance.
Currently, several factors hinder Cambodia’s green finance potential, including a lack of guidance on what qualifies as green finance and limited green policies among local financial institutions to innovate and introduce sustainable finance practices and products.
“Cambodia is at a critical juncture where climate change impacts are becoming increasingly evident, and there is an urgent need to build capacity and expertise within the financial sector to effectively manage and promote green finance initiatives,” said Dith Sochal, Association of Banks in Cambodia’s Council Member and Chairperson of its Sustainable Finance Committee. “The training provided participants with valuable insights and practical strategies that they will take back to their respective institutions.”
Given that the country is highly vulnerable to floods, droughts, and rising sea levels, the CCDR estimates that without proper adaptation and mitigation measures, climate change could cost up to 9 percent of Cambodia’s gross domestic product by 2050.
The World Bank Group recently approved its Country Partnership Framework for Cambodia for 2025-2029, which emphasizes on promoting the nation’s human capital to enhance competitiveness and foster resilience. Hoque added, “IFC’s efforts aim to support a strong and competitive private sector, which will play a pivotal role in driving the country’s next phase of low-carbon and sustainable economic development.”
