Thailand to issue Asia’s 1st sovereign sustainability-linked bond

Thailand plans a record-breaking $1.1 billion sovereign sustainability-linked bond (SLB) issue in the fourth quarter, becoming the first Asian government to utilise this innovative financing tool in baht to address its budget deficit, Bloomberg reported on Wednesday.

In a recent interview, Jindarat Viriyataveekul, a public debt advisor at the Ministry of Finance, confirmed the plan to issue bonds linked to carbon reduction programmes. The initiative supports Thailand’s goal of achieving carbon neutrality by 2050 and will target both local and foreign institutional investors.

The Ministry of Finance is prioritising SLB issuance over foreign-currency bond offerings due to the weak baht and uncertainties surrounding Federal Reserve monetary policy.

SLBs offer greater flexibility compared to traditional sustainability bonds, allowing a wider range of projects to be supported to contribute to Thailand’s sustainability goals, as per the statement.