Thailand Issues Asia’s First Sovereign Sustainability-Linked Bond, Raising $880 Million

Thailand has made a significant step in its climate action efforts by issuing Asia’s first sovereign sustainability-linked bond (SLB), raising 30 billion baht ($880 million) to finance measurable environmental targets. The issuance, which took place on November 25, 2024, was met with overwhelming demand, being oversubscribed by 2.7 times and attracting strong interest from both local and international investors.

The 15-year bond is tied to two major sustainability milestones: a 30% reduction in greenhouse gas emissions and the deployment of 440,000 zero-emission vehicles (ZEVs) such as passenger cars and pickup trucks by 2030. These targets align with Thailand’s broader climate commitments as the country aims to achieve carbon neutrality by 2050 and net-zero emissions by 2065.

The Asian Development Bank (ADB) played a key role in the issuance, providing technical assistance through its Green, Social, Sustainable, and Other Labeled (GSS+) Bonds Initiative. This program, supported under the ASEAN Catalytic Green Finance Facility and the Asian Bond Markets Initiative, focuses on boosting green infrastructure investments and strengthening local currency bond markets in Southeast Asia.

Anouj Mehta, ADB’s Country Director for Thailand, emphasized the importance of innovative financial solutions like SLBs in accelerating climate goals. “This bond reflects ADB’s commitment to supporting Thailand’s sustainability targets through creative financing tools,” he said.

Patchara Anuntasilpa, Director General of Thailand’s Public Debt Management Office (PDMO), noted that the SLB issuance underscores Thailand’s dedication to tackling climate change while fostering economic sustainability. “The SLB structure highlights our approach to building a greener economy and more sustainable society,” Patchara stated.

The success of this bond highlights the growing role of public-private investments in addressing climate challenges. Thailand’s SLB serves as a blueprint for state enterprises and private-sector players in advancing sustainable finance initiatives across the region.

By tying financial terms to concrete climate goals, Thailand’s sovereign SLB not only demonstrates investor confidence but also sets a benchmark for other nations in Asia. It showcases how capital markets can drive meaningful environmental progress while supporting economic growth and resilience.