Tris Rating debuts green bond verifier

Tris Rating debuts green bond verifier

Tris Rating has launched a local green bond verifier, certified by the Climate Bonds Initiative, as a new service to facilitate and promote domestic green bond financing.

Tris president Sakda Pongcharoenyong said the fee for local green bond verification will be six figures in baht per issuance, which is significantly lower than fees charged for international verification.

In the first phase, the company will focus on verifying green bonds for non-complex sectors such as renewable energy and clean transport, including mass transit electric trains, then expand to more complicated sectors, he said.

"We also plan to partner with Asian Development Bank, rating agencies, and related parties in Asean to set the standards for Asean countries," said Mr Sakda.

"The existing Asean green bond standard are only general guidelines, not in-depth or technical criteria that can be used to examine how the projects could help the environment."

Green bonds are a type of debt securities issued to finance environmentally sustainable projects and assets.

They differ from traditional bonds because they are concerned with the nature of projects or assets they are assigned to.

To ensure the projects or assets have a positive effect on the environment, there will be add-on expenses for external reviewers to provide independent second-party opinions and verification, certifying the projects comply with the four principles issued by International Capital Market Association.

GREEN FINANCE HOTSPOT

Green bond financing in the global market saw continued growth, soaring by 51% during 2018-19, with 1,788 total deals worth US$258 billion from 496 issuers.

Total issuance volume is projected at $200 billion this year, an increase of 12% from 2019.

The cumulative volume since 2007 could reach $1 trillion this year.

The proceeds are mostly used for energy (32%), buildings (30%), transport (20%), and other purposes such as water, waste and land use (18%).

In Thailand, many green bonds were oversubscribed and the volume of domestic issuance reached 60 billion baht in the past three years.

A green bond is a subset of environmental, social and governance (ESG) bonds that reported cumulative volume worth 100 billion baht from 12 issuers since being launched in Thailand.

Ruenvadee Suwanmongkol, secretary-general at the Securities and Exchange Commission (SEC), said Thailand has the potential to be a regional green bond financing hub, partly because of the SEC's policy to cut the ESG bond issuance fee since 2018.

The fee has been cut twice and could be cut again next year, she said.

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