MoUs signed promoting environmental banking
BANK financing focusing on env ironmental protection, natura l resource management and climate change in Cambodia may be strengthened follow ing t he signing of two memorandums of understanding (MoUs) by severa l releva nt institutions on Wednesday.
The MoUs on “Cooperation of Sustainable Finance” were signed by the Association of Banks i n Cambodia (ABC).
One was signed by t he ABC, the Ministr y of Environment and the National Bank of Cambodia. The other was signed by the ABC and USAID Cambodia.
The goal of the MoUs are to strengthen and develop sustainable financial cooperation in t he banking sector and support env ironmental protection, natura l resource management and climate change in the Kingdom.
Sustainable preservation
In Channy, president of the ABC, which comprises more than 60 members, said the signing is testament to t he involvement of t he Kingdom’s banking sector in sustainable env ironmental preser vation.
“Banks caring about lending to customers who take care of the env ironment is a key part of sustainable financing,” said Channy.
For an investment to work well, a bank’s lending should ta ke into account key factors, including people, profit and t he planet, he said.
He continued that sustainable financing may prov ide banks with access to low-interest loans from large banks abroad for t heir business operations.
Before t he signing, t here was no standard set of common principles concerning the env ironment and natura l resources regarding domestic bank lending to investment projects, Channy said.
Foreign Trade Bank of Cambodia deput y genera l manager Lay Rachana said lending is currently made only in compliance with each banks’ respective policies.
She expressed her hopes t hat follow ing t he signing, bank financing will follow one common set of principles.
She added that through the MoU, the ABC will receive both technica l and financial cooperation for training on and promoting sustainable financing.
The Ministr y of Environment will prov ide the ABC wit h relevant information – including env ironmental law and climate change – which t he association’s members will assess before prov iding loans to customers.
“Without t he MoUs, it would have been dif ficult for institut ions to of ficia lly support t he association,” she said.
Ministr y of Environment secretar y of state Sao Sopheap said working with the ABC is an example of cooperation between the government and the private sector to implement the state’s rectangular strateg y related to environmental protection.
Sang Lee, director of Food Securit y & Environment Office at USAID Cambodia, which has supported the ABC on its Sustainable Finance Init iat ive since 2015, said his organisation will continue to play an i mportant role to f urt her its mission of building a green economy in Cambodia.