Three companies are in the process of seeking Securities and Exchange Commission (SEC) approval to issue green bonds as part of the environmental, social and governance (ESG) standard.
Green bonds are defined as a part of a company's ESG standard and are one of the crucial aspects supporting long-term sustainable growth for corporates.
The three companies planning to launch green bonds with the SEC operate in the transport, energy and electricity power plant sectors, said Sittasri Nakasiri, director of the SEC's bond department.
In the middle of 2018, TMB Bank became the country's first issuer of green bonds to finance environment-related projects worth US$60 million (1.82 billion baht).
The bank largely offered the seven-year green bonds to the International Finance Corporation, with proceeds arising from the bond issuance to be used to finance climate-related projects and contribute to sustainable development.
Funds from the bond offering are to be lent to renewable energy and energy-efficiency projects benefiting both the economy and the environment.
The process of launching green bonds is more complicated than debenture issuance, as the project must be verified by a third-party source to approve the standard of issuance process, Mrs Sittasri said.
Green bond issuance, therefore, shoulders higher financial costs for financial advisory services compared with regular debt instruments, she said.
In a bid to support companies' green bond issuance, the SEC has waived the approval fee and project filing fee for such issuance. The securities watchdog has also worked closely with the Stock Exchange of Thailand (SET) to facilitate the issuance process.
SET president Pakorn Peetathawatchai said the bourse supports listed firms planning to issue green bonds in order to encourage companies to adhere to the ESG standard.
The SET will cooperate with the Asian Development Bank (ADB) in helping Thai companies to launch more green bonds in the future, Mr Pakorn said.
Separately, the ADB will invest 3 billion baht in SET-listed renewable energy firm Energy Absolute Plc's maiden green bond issuance.
The proceeds from this transaction will help support the long-term financing of the company's 260-megawatt Hanuman wind farm in Chaiyaphum province.
The investment will contribute to Thailand's renewable energy objectives and its ongoing efforts to reduce carbon emissions, according to the ADB.
The bond will have a total issuance of 10 billion baht. It will only be the second Climate Bonds Standard-certified bond issued by a Thai energy company and the first green bond for a wind power project in Thailand.
Proceeds from green bonds are used to fund, in part or in full, new or existing projects that deliver environmental or climate-related benefits.
