The International Finance Corp. (IFC) and Cambodian financial authorities have held a training course for more than a hundred local bankers to improve their knowledge of green finance and unlock capital for climate-friendly projects.
“The importance of sustainable finance cannot be overstated,” says Towfiqua Hoque, the new IFC resident representative in Cambodia. “It is not just about mitigating risks associated with climate change, but also about seizing opportunities that come with the green transition.”
“By integrating environmental, social, and governance considerations into the financial systems, we can create a more resilient and inclusive economy,” she adds.
The IFC, the World Bank's private-sector arm, says the training on October 17 was in collaboration with the Association of Banks in Cambodia with experts from the National Bank of Cambodia – the central bank – and the local Securities and Exchange Commission.
Topics covered included sustainable finance taxonomy, environmental and social risk management, and recent trends and opportunities in the sector.
‘Urgent need to build capacity'
“Cambodia is at a critical juncture," says Dith Sochal, the chief executive officer of Foreign Trade Bank of Cambodia who also chairs the sustainable finance committee at the bank association.
“Climate change impacts are becoming increasingly evident,” he says. “There is an urgent need to build capacity and expertise within the financial sector to effectively manage and promote green finance initiatives.”
The IFC says the training is part of its wider cooperation with the central bank to boost green finance by developing local capital markets.
“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,” it says.
According to a report by the IFC and the World Bank released in October last year, Cambodia will need US$36 billion in both private and public investment over the next 27 years to meet its goal of carbon neutrality by 2050.
High vulnerability
With Cambodia highly vulnerable to floods, droughts and rising sea levels, the report reckons that climate change could affect up to 9 percent of Cambodia's gross domestic product by 2050 – unless proper adaptation and mitigation measures are taken.
In her new role in Phnom Penh, Hoque is expected to lead initiatives to bolster Cambodia’s financial sector, advance renewable energy, promote green transport and logistics infrastructure, and expand climate finance.
“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,” she says.
The training came a day after the World Bank in Washington approved a country partnership framework for Cambodia for 2025-2029, which focuses on promoting its human capital to enhance competitiveness and foster resilience.
