To protect Thailand’s blue economy and scale up financing for green projects, IFC is subscribing to a $400-million green and blue bond issued by Bank of Ayudhya Public Company Limited (known as Krungsri), which aims to further support climate action and sustaining ocean health. 

IFC’s support will help Krungsri—the fifth largest commercial bank in Thailand—to dedicate $5million towards extending loans for eligible blue assets, such as water supply, fisheries, aquaculture, and others, as well as to deploy the remaining amount toward financing eligible green assets, such as retail electric vehicles. The entire bond will adhere to the International Capital Market Association’s Green Bond Principles, with the blue portion following IFC’s Guidelines for Blue Finance.

“With this maiden blue and green bond issuance, we hope to scale up our climate finance portfolio, thus significantly contributing to the achievement of our interim sustainable finance target of $1.5 billion – $3 billion aimed for 2030,” said Kenichi Yamato, Krungsri President and Chief Executive Officer. “With IFC’s support, we will continue to assert our robust leadership in thematic bond issuance while positioning ourselves as a trusted partner when it comes to sustainable finance solutions.”

In addition to the investment, IFC will help Krungsri develop its green and blue bond framework and update its environmental and social risk management system related to green and blue assets.

See related article: https://esgnews.com/ifc-invests-20-million-in-boston-metal-to-support-commercialization-of-zero-carbon-steel-production/

“Sustainable finance and promoting a circular economy are IFC’s strategic priorities in Thailand and we are honored to collaborate with Krungsri, one of our most important strategic partners, on this initiative,” said Jane Yuan Xu, IFC Country Manager for Thailand and Myanmar. “This landmark investment will help mobilize more private capital for green and blue financing, which is crucial for the country’s climate goals.”

Over the past few months, Thailand along with other countries in Asia experienced record-breaking heatwaves with devastating effects. According to Joint Standing Committee on Commerce, Industry and Banking, drought, floods and other extreme weather exacerbated by climate change could cause damage worth 36 billion baht to the Thai economy this year.

Another major climate challenge for Thailand is the threat to its blue economy, which contributes to approximately 30 percent of GDP (gross domestic product). According to the Thailand Development Research Institute, Thailand has an average sof 1.03 tonnes of mismanaged waste each year. Nearly half of it flows into the sea. The country is also one of the top six contributors globally to marine plastic pollution.