Thailand’s state utility operator Provincial Electric Authority (PEA) is issuing its first sustainability bond amounting to one billion baht (US$35 million) to support the development of renewable energy projects and improve energy access across the country.

The five-year bond, backed by the Asian Development Bank (ADB), will be issued on August 21 to Thai institutional investors, marking a significant step towards developing a robust and sustainable bond market in Thailand.

The proceeds will support PEA’s sustainability agenda, which aims to develop projects that will promote renewable energy, such as microgrid development, and enhance climate resilience and climate adaptation initiatives, such as submarine cables to remote islands. PEA will also use the funds to improve energy accessibility, particularly to areas without access to electricity, and elevate the quality of life for beneficiaries.

ADB country director for Thailand Anouj Mehta says the transaction affirms the development bank’s commitment to supporting pioneering, ESG-driven capital market issuances by state-owned enterprises and private corporations that align with the Asean Taxonomy for Sustainable Finance, the region’s framework for assessing sustainable activities.

“PEA is demonstrating the key role utility operators play in supporting the country’s decarbonization, given the significance of the energy sector in contributing to Thailand’s greenhouse gas emissions,” Mehta points out. “We hope to create more sustainable bond issuances, increase the mobilization of public and private capital, and support sustainable and transition financing in the region.”

According to PEA governor Supachai Ek-Un, the state enterprise is committed to achieving carbon neutrality by 2037, which is 13 years earlier than the national target, and net zero by 2065, in line with the Government of Thailand’s policy. He says that in collaboration with ADB, PEA has developed a sustainable finance framework that adheres to international and regional standards, aimed at building investor confidence and aligning with the Sustainable Development Goals (SDGs). “PEA will issue sustainability bonds and promote both green and social finance,” he adds.

ADB provided technical assistance through the Green, Social, Sustainable and Other Labeled (GSS+) Bonds Initiative for Southeast Asia, a collaboration between the Asian Bond Markets Initiative (ABMI) and the Asean Catalytic Green Finance Facility (ACGF). ABMI is an initiative of the governments of Asean, the People's Republic of China, Japan and the Republic of Korea to develop local currency bond markets. The ACGF is an initiative of the Asean Infrastructure Fund to accelerate green infrastructure investments in Southeast Asia.

PEA is responsible for providing electricity in 74 provinces in Thailand –except Bangkok, Samut Prakan, and Nonthaburi – which are served by the Metropolitan Electricity Authority.