The Australian Government will partner with the
Securities and Exchange Commission of Cambodia (SECC) to launch the landmark
Domestic Capital Mobilisation for Infrastructure Investment through the
Security Market Project.
The SECC is the regulator of the Cambodia
Securities Exchange (CSX) launched in 2011 and operated by the Cambodian
Government and the Korea Exchange.
Funded through Australia’s AU$50 million ($35
million) flagship infrastructure programme the partnership will provide
technical assistance to develop a regulatory framework for specific
infrastructure bonds with long-term debt.
The bonds will assist in building the capacity
of market participants and developing measures to give the private sector in
Cambodia more tools to invest in government infrastructure.
The technical assistance will also identify one
pilot infrastructure project.
Speaking to Khmer Times the Australian Embassy
said, 3i and the SECC will assess the suitability of existing regulations to
support infrastructure bonds.
They added that these bonds will be
fundamentally different from the currently issued listed bonds in terms of
tenor, project risk profile and issuer profile.
“Based on this review, the technical assistance
component will recommend any updates to the current regulatory framework to
best support the issuance of new infrastructure bonds,” the embassy said.
“The aim is to initiate a pilot project before the end of 2021. The type of project
which will be piloted will depend on both issuer interest and investor
appetite,” the embassy added.
Sok Dara, Deputy Director-General of the SECC
said, investments in infrastructure is
not very broad in Cambodia and businesses which are seeking funds for those
investments are still not active in terms of the security market.
“For example projects for the bus ride from the
airport and connecting the roads to highways need a large budget. Meanwhile,
only some of these projects are profitable. For example, people pay for the bus
fee which means a return for the investor. The investor uses this revenue to
draw investment. This is how one investment leads to another,” he said.
“We will inspect the actual demand in the
market the securities market is a permanent and long term source of capital. We
will also study the rules and regulations for the real practise to evaluate
which project can be completed this way,” he added.
While the CSX is partially operated by the
Korea Exchange, the Australian Embassy
said that the Australian Government, through 3i is providing technical
assistance to the SECC, and not the CSX.
“The SECC is an independent regulatory body
from the CSX. Australia has a decade-long history of support to the SECC to
develop its securities markets rules and regulations to regional and global
best practices to support the operations of the Cambodian capital markets,” the
embassy said.