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ESG Investing / Treasury & Capital Markets
Thai retail property developer issues first SLB
IFC-backed offering aims to reduce GHG emissions, meet firm’s green building targets
The Asset 25 Sep 2024

Central Pattana Public Company, one of Thailand’s leading retail property developers, has issued its first sustainability-linked bond (SLB), amounting to 8 billion baht (US$245.40 million), supported by the International Finance Corporation (IFC) as part of its efforts to accelerate the country’s green transition.

Under the issuance announced on September 24, the IFC is investing 3.48 billion baht (US$100 million) in the transaction, representing its first investment in a publicly-listed bond in Thailand. The proceeds will be used for greenhouse gas (GHG) emission reduction initiatives and to support Central Pattana to meet its green building targets. IFC is the World Bank's financing arm.

The SLB is being issued under the developer’s sustainability-linked financing framework, which is aligned with the Sustainability-Linked Bond Principles issued by the International Capital Market Association. Under the terms of the SLB, Central Pattana has set a sustainability performance target of more than 40% absolute emission reduction by 2031 as compared with the 2019 benchmark.

Aside from financing, IFC will also assist the company in accelerating sustainability performance targets, greening its portfolio through IFC’s EDGE building certification, and updating its decarbonization strategy. The combined financial and advisory support is expected to help the developer achieve its target to green 20% of its property assets by 2030, which comprises 6.7% of Thailand’s retail property market.

The successful issuance of the developer’s first SLB marks a significant milestone in the company’s journey toward net zero and a testament to its commitment to helping Thailand achieve its sustainability goals, says Naparat Sriwanvit, its CFO and senior executive vice-president for finance, accounting and risk management. “By linking our borrowing costs to our performance against ambitious sustainability targets, we are incentivizing positive change and contributing to the growth of Thailand’s ESG [environmental, social and governance] bond market.”