GuarantCo and PIDG collaborate with CGCC to accelerate financial inclusion and enhance investment in sustainable infrastructure in Cambodia

  • Date written
  • August, 2024

GuarantCo, the Private Infrastructure Development Group (PIDG) and the Credit Guarantee Corporation of Cambodia (CGCC) have signed a Memorandum of Understanding (MoU) which is intended to accelerate sustainable financial inclusion and increase investment opportunities in Cambodia. The collaboration will also facilitate the scale up of CGCC’s capacity through involvement in a range of transaction types with GuarantCo and PIDG Technical Assistance (TA).

GuarantCo and PIDG collaborate with CGCC to accelerate financial inclusion and enhance investment in sustainable infrastructure in Cambodia

The signing ceremony was attended by delegates who joined virtually and in-person including Dominic Williams, the British Ambassador to Cambodia; Wong Keet Long, CEO at CGCC; Philippe Valahu, CEO at PIDG; Layth Al-Falaki, CEO at GuarantCo, Nishant Kumar, Managing Director, Asia at GuarantCo and Denesh Srishanker, Credit Enhancement Facilities Director at PIDG

Having completed three transactions in Cambodia, GuarantCo is seeking to develop CGCC’s capital market guarantee capability via the PIDG Credit Enhancement Facility initiative. This programme aims to increase the availability of onshore local currency guarantees in target markets through partnering with local entities and utilizing products from across the PIDG Group, in this case re-guarantee facilities from GuarantCo and technical assistance from PIDG TA.

The MoU being signed is the first step towards a broader Framework Agreement, which both parties hope to close and execute later this year, covering syndication of GuarantCo guarantee exposure to CGCC and vice versa, as well as technical assistance.

The Technical Assistance programme will assist CGCC to develop key guarantee documents and engage a transaction counsel to advise on the facility documentation, as well as provide capacity building support on credit, investment and Sustainable Development Impact management processes.

Philippe Valahu CEO of PIDG, said:

“Local financing solutions are an essential part of our 2030 strategy and the establishment of in-country credit enhancement facilities is a key objective to help develop local markets. Signing this Memorandum of Understanding with the Credit Guarantee Corporation of Cambodia will help expedite this work.”

Layth Al-Falaki, CEO of GuarantCo, said:

“We are proud to have signed this Memorandum of Understanding with the Credit Guarantee Corporation of Cambodia and to be able to mobilise guarantee capacity to help CGCC expand to undertake transactions in progressive sustainable financing through the local capital markets, in line with PIDG and GuarantCo’s strategic plans. GuarantCo’s engagement in Cambodia started in 2022 through transactions with First Finance and Royal Railway followed by Cellcard in 2023. Through this MoU with CGCC, we are continuing our momentum in the country to the advantage of Cambodians who will benefit from improved infrastructure.”

Wong Keet Loong, CEO of the Credit Guarantee Corporation of Cambodia, said:

“We are honoured to have the opportunity to work with GuarantCo, an established international guarantee provider, funded by seven G12 governments including the United Kingdom, Switzerland, Sweden, Australia, the Netherlands, Canada and France. CGCC will benefit from the technical expertise to embed best practices into our bond guarantee processes. We are excited with this collaboration and look forward to the structured facility which will expand our guarantee capacity.”

NOTES TO EDITORS

About GuarantCo

GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. Since 2005, GuarantCo has enabled USD 6.8 billion of total investment and USD 5.7 billion of private sector investment, giving 44.7 million people access to infrastructure and creating around 243,000 jobs. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com

About PIDG

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity and urgency.

PIDG offers Technical Assistance for upstream, early-stage activities and concessional capital; its project development arm – which includes InfraCo Africa and InfraCo Asia – invests in early-stage project development and project and corporate equity. PIDG credit solutions include EAIF (the Emerging Africa Infrastructure Fund), one of the first and more successful blended debt fund in low-income markets; GuarantCo, its guarantee arm that provides credit enhancement and local currency solutions to de-risk projects; and a growing portfolio of local credit enhancement facilities, which unlocks domestic institutional capital for infrastructure financing.

Since 2002, PIDG has supported 233 infrastructure projects to financial close, which provided an estimated 228 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Global Affairs Canada, Germany, and the IFC. pidg.org

About Credit Guarantee Corporation of Cambodia

CGCC is the only credit guarantee corporation in Cambodia, established by the decision of Samdech Akka Moha Sena Padei Techo Hun Sen, as a state-owned enterprise under the technical and financial guidance of the Ministry of Economy and Finance. The primary mission of CGCC is to provide credit guarantees to improve financial inclusion and support the growth of SMEs in Cambodia. On 31 January 2024, CGCC launched as the First Cambodian Bond Guarantor after being accredited by the Securities and Exchange Regulator of Cambodia (SERC) and rated khAAA, the highest rating by the local rating scale, by the Rating Agency of Cambodia on 19 December 2023. CGCC aims to provide guarantees on local corporate bond issuances on the Cambodia Securities Exchange (CSX) to support local companies raising funding and the development of the securities sector in Cambodia. www.cgcc.com.kh