Thailand’s first certified climate bond issued

Breakthrough development is part of Thailand’s ongoing efforts to promote low-carbon growth and also ADB’s wider strategy to pump finance into climate change projects

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The Asian Development Bank (ADB) will invest 5 billion baht (US$155 million) in the maiden green bonds by B.Grimm Power Public Company of Thailand, representing the first certified climate bonds to be issued in Thailand. These details were announced on December 11.

The transaction comprised of two tranches – five years and seven years – with the proceeds earmarked for nine operational solar power plants with a total capacity of 67.7 MW and seven solar plants under construction, all in Thailand and with a total capacity of 30.8 MW.

B.Grimm Power president Preeyanart Soontornwata says the issuance will foster the development of the green bond market in Thailand by showcasing international best practice for genuine green and climate bonds. She highlighted ADB's support in ensuring the bonds comply with the International Capital Markets Association Green Bond Principles and Climate Bond Initiative standards.

ADB's director-general for private sector operations department, Michael Barrow, says the green bond will help Thailand achieve its target of reducing greenhouse gas emissions by an unconditional 20% by 2030, noting that B.Grimm Power is a pioneer of renewable energy and low-carbon growth in Thailand and increasingly across the region.

The transaction marked the second green bond project for ADB. In 2016, it extended a guarantee to support an issuance for the Tiwi and Makban geothermal power project in the Philippines, representing the country's first green bond offering.

It was also the third transaction by ADB with B.Grimm, having subscribed to the company's IPO in 2017. In February this year, it signed a loan agreement with the company equivalent to up to US$235 million to support its expansion into renewable and distributed power generation markets throughout Southeast Asia.

B.Grimm was established in 1993 and is one of Thailand's largest private power producers with a total capacity of 2,045 MW across 15 gas-fired plants. In recent years, it has diversified into renewable energy and now also operates 15 solar power plants. Based on this success and strong potential for expansion in Asean countries, B.Grimm plans to increase the share of renewable energy generation in its portfolio from 10% to 30% by 2021.

The latest B.Grimm investment is in line with ADB's new Strategy 2030, which mandates that at least 75% of the number of ADB's committed operations will support climate change mitigation and adaptation by 2030, with climate finance from its own resources reaching US$80 billion over 2019-2030.

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Date

14 Dec 2018

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