A $70m guarantee supports a sustainability bond and a loan for CamGSM, which will use the proceeds to provide improved telecoms services for over one million Cambodians.
GuarantCo, owned by the Private Infrastructure Development Group (PIDG), has provided Cambodian telecoms firm CamGSM, which operates the country’s Cellcard network, with a $70m (€64m) guarantee to support a sustainability bond and a loan.
The bond has been fully subscribed by Manulife Cambodia and by Prudential Cambodia, which is listed on the Cambodian Stock Exchange. Deutsche Bank AG’s Singapore branch has provided financing for the loan.
GuarantCo said Moody’s Investor Services had provided a second party opinion on Environmental, Social and Governance (ESG) alignment with international standards for both the bond and loan. It is hoped that GuarantCo’s involvement will also help support Cambodia’s fledgling securities market.
Expanding services
Improvements to Cellcard’s operations are made possible by the funding, which include wider coverage, faster speeds and increased data capacity. They are seen delivering significant positive impacts for Cambodians by targeting UN Sustainable Development Goal 9 on increasing access to information and communications technology.
The funding will support construction of 4G telecommunication towers, installation of energy efficient equipment and preparing the network for a 5G rollout.
More than a million consumers, as well as Cambodian businesses, are expected to see improvements to their lives through the upgrade. GuarantCo said some 260 jobs would also be created to build, maintain, and administer the expansion, adding that 20% of Cellcard’s management and 30% of the workforce are women.
CamGSM is owned by Cambodia Royal Group, whose Royal Railway also received a $24m bond guarantee from GuarantCo in December 2022, also in partnership with Manulife Cambodia and Prudential Cambodia.
Layth Al-Falaki, GuarantCo’s CEO, said working with the same partners had simplified the transaction.
“Replicability is a key focus area for GuarantCo in order to close transactions faster and, in so doing, provide people in lower income countries across Africa and Asia with much needed sustainable infrastructure,” he said.
Seng Chan Thoeun, CEO at Royal Group Securities said the issuance of Cambodia’s first sustainability bond showed the group remained committed to raising more capital for local businesses, generating a ripple effect on people’s livelihood.
The guarantee is also seen as supportive for the development of Cambodia’s fledgling securities market by encouraging the inflow of foreign capital.
The CamGSM transaction is the latest in a growing total of impact-related financing for businesses in countries in Southeast Asia, including Cambodia, whose financial systems are strengthening. Over the last year, Impact Investor has reported on Dutch development agency SNV’s support for Cambodian coffee producer Kofi, and funding from development finance institutions for an energy transition fund targeting Southeast Asia, among other investments.
