The Public Debt Management Office (PDMO) is preparing to issue Thailand’s second sustainability-linked bond (SLB), aiming to raise 15 billion baht through a 15-year issuance tied to the country’s climate and biodiversity goals.
The bond, designated SLB425A, will be linked to two sustainability key performance indicators, Jindarat Viriyataveekul, director-general of the PDMO, said on Wednesday.
The first indicator aims to reduce Thailand’s net greenhouse gas emissions, including emissions from land use, land-use change and forestry, to 152 million tonnes of carbon dioxide equivalent by 2035, representing a 47% reduction from 2019 levels.
The second targets an increase in protected terrestrial and inland water areas, as well as biodiversity conservation areas outside formally protected zones, to at least 30% of the country’s total area by 2030.
“The second SLB will be an important mechanism supporting climate action alongside biodiversity conservation while encouraging participation from the financial and capital markets in advancing the country’s sustainability goals,” Ms Jindarat said.
Unlike conventional sustainability bonds, which finance specific projects, the second SLB ties fundraising to national policy targets and performance outcomes. The proceeds will be used to help finance the government’s budget deficit rather than for a designated project.
The final coupon rate has yet to be determined and will depend on investor demand and market conditions. The PDMO expects to confirm the interest rate and final issue size on Sept 10.
Under the bond’s structure, the coupon would remain at the agreed level if the sustainability targets are achieved. Failure to meet the targets would trigger a higher interest cost.
The PDMO plans to hold a domestic investor roadshow on Aug 31, followed by meetings with overseas investors from Sept 1-4 to explain the bond’s fundraising framework and financial structure.
Thailand became the first government in Asia to issue a sovereign sustainability-linked bond in November 2024, with strong investor demand prompting the PDMO to increase the inaugural offering from 20 billion to 30 billion baht.
