Thailand Issues Asia’s First Sustainability-Linked Bonds
- Nov 28, 2024
- 2 min read
Thailand has made history as the first Asian country to issue sustainability-linked bonds (SLBs), with overwhelming investor interest driving demand to nearly three times the initial amount, according to Patchara Anuntasilpa, Director-General of the Public Debt Management Office (PDMO).
The book-building process on 19 November saw purchase proposals totalling 55.3 billion baht, 2.76 times the original issuance size of 20 billion baht. In response to this remarkable demand, the PDMO increased the issuance to 30 billion baht at an annual interest rate of 2.70%. Investors included life insurance companies, funds, financial institutions, securities firms, asset managers, and foreign participants.
“Thailand is the first Asian government and only the third globally, after Chile and Uruguay, to successfully issue SLBs,” noted Mr Patchara. These bonds are tied to ambitious key performance indicators (KPIs) and sustainability performance targets (SPTs). The goals include capping Thailand’s greenhouse gas emissions at 388,500 kilotonnes of CO2 equivalent by 2030 and registering at least 440,000 new zero-emission vehicles in the passenger and pickup categories by the same year.
The framework for these bonds, certified by DNV (Thailand), ensures alignment with UN Sustainable Development Goals and compliance with standards set by the International Capital Market Association and the Asean Capital Market Forum. This certification strengthens investor confidence and demonstrates the bonds’ robust approach to sustainable development.
Looking ahead, Mr Patchara highlighted plans to issue a 15-year benchmark SLB to improve market liquidity and provide a pricing reference. He added that SLBs set a standard for best practices across public and private sectors, driving Thailand toward a more sustainable economy.
“These bonds signal Thailand’s commitment to combatting climate change and promoting long-term sustainability,” he said. Additionally, the PDMO plans to issue a sustainability loan later this year to fund clean energy transport projects, continuing its push for innovative sustainable finance solutions.
Thailand’s success with SLBs marks a significant step in aligning economic growth with global sustainability goals, paving the way for future advancements in sustainable finance.
Original article by Wichit Chantanusornsiri for the Bangkok Post. Read more here on in the PDF below.
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