• Milestone Bond Issuance: Thailand’s 30 billion baht ($880 million) sustainability-linked bond (SLB) is the first in Asia and third globally.
• Climate Goals Aligned: The SLB targets a 30% reduction in greenhouse gas emissions and 440,000 zero-emission vehicles by 2030.
• Capital Market Development: The oversubscribed bond highlights the role of public-private investment in Thailand’s net-zero transition.

Why it matters:

The Asian Development Bank (ADB) is supporting innovative financial tools like sustainability-linked bonds (SLBs) to accelerate climate action in Thailand and across Asia. These bonds tie financial terms to the achievement of measurable sustainability goals.

The news:

On 25 November 2024, Thailand issued Asia’s first sovereign SLB, raising 30 billion baht ($880 million). The bond, with a 15-year maturity, aims to:

• Cut greenhouse gas emissions by 30% by 2030.
• Increase zero-emission vehicles (ZEVs) to 440,000 passenger cars and pickup trucks by 2030.

The issuance was oversubscribed by more than 2.7 times, reflecting strong local and international investor confidence.

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“This bond reflects ADB’s commitment to innovative financial solutions to support Thailand’s climate targets,” said Anouj Mehta, ADB Country Director for Thailand.

Strategic impact:

This SLB builds on ADB’s previous work supporting Thailand’s first sustainability bond in 2020 and highlights the potential of capital markets to attract both public and private investments for sustainability initiatives.

“The SLB structure reflects Thailand’s commitment to addressing climate change and fostering a sustainable economy and society,” said Patchara Anuntasilpa, PDMO Director General.

How it works:

ADB provided technical assistance for the SLB through the Green, Social, Sustainable and Other Labeled (GSS+) Bonds Initiative under the ASEAN Catalytic Green Finance Facility (ACGF) and Asian Bond Markets Initiative (ABMI). These programs aim to accelerate green infrastructure investments and develop local currency bond markets across Southeast Asia.

The bigger picture:

Thailand’s SLB issuance showcases how innovative financial instruments can drive climate action while strengthening local capital markets. It serves as a model for state enterprises and the private sector to advance sustainable development collaboratively.

Bottom line:

ADB’s support for Thailand’s SLB underscores the importance of public-private partnerships and innovative financing in achieving regional climate goals. By leveraging capital markets, Thailand is setting a precedent for sustainable economic growth and its journey toward carbon neutrality by 2050 and net-zero emissions by 2065.

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