Private Infrastructure Development Group ( PIDG ) says its long-term local-currency financing arm has provided a US$7 million portfolio guarantee to Credit Guarantee Corp of Cambodia ( CGCC ). 

The 10-year guarantee from GuarantCo is part of a new framework agreement for bond guarantees and PIDG technical assistance with the aim of deepening Cambodia’s corporate and project bond market, the multilateral infrastructure development and finance organization says

In a statement released on January 17, PIDG says the portfolio guarantee “will allow CGCC to mobilize further bank lending towards small and medium-sized enterprises ( SMEs ), with a focus on businesses supporting the green transition”.

The framework agreement follows a memorandum of understanding in August last year to increase the state-owned company’s involvement in big corporate and project finance deals in Cambodia.

Infrastructure financing via capital markets

“CGCC and GuarantCo will look to execute counter- and co-guarantees under the framework, with a particular focus on catalyzing sustainable infrastructure financing via the capital markets in Cambodia,” the statement says.

The accompanying technical assistance from London-based PIDG “will support CGCC to develop its technical capabilities in capital markets, allowing both organizations to scale their impact”, it adds.

No Lida, chief executive of CGCC, says the company’s first international deal, along with the framework agreement, aligns with its strategy to enhance its bond-guarantee capacity and support SME development.

“We seek to embed the international best practices represented by GuarantCo and PIDG as we build our capacity,” he says. “We will learn from each other’s expertise while driving forward sustainable infrastructure.”

GuarantCo deputy chief executive Chinmay Naralkar says the framework will provide “progressive sustainable infrastructure financing through local capital markets to support a green transition”.

GuarantCo is funded by the governments of the United Kingdom, Switzerland, Australia, Sweden, Canada and France. With the exception of France, the same governments fund PIDG along with the German government and the World Bank’s International Finance Corp.

Since its establishment by as a state-owned company in 2020, CGCC has received technical assistance from the World Bank, the Asian Development Bank and the UN Capital Fund. The company launched its first guarantee scheme in 2021.