B Grimm Power, one of Thailand’s leading private power producers, on Tuesday announced a landmark issuance of the Kingdom’s first certified climate bonds.
B Grimm’s maiden green debentures, worth Bt5 billion with five- and seven-year maturity, were subscribed by the Asian Development Bank (ADB).
The proceeds will go towards the listed company’s renewable-energy development projects in Thailand as part of its contribution to establish a low-carbon pathway for sustainable economic growth.
The issuance plays an important part in B Grimm’s drive to raise the share of renewable-energy generation in its overall portfolio from 10 per cent to 30 per cent by 2021, said president Preeyanart Soontornwata.
“The ADB’s support was invaluable to ensure the bonds comply with the International Capital Markets Association’s Green Bond Principles and Climate Bond Initiative standards, while building on a long-standing relationship B Grimm and the ADB have forged through multiple transactions,” she added.
“This green bond will help Thailand achieve its target of reducing greenhouse-gas emissions by an unconditional 20 per cent by 2030,” Michael Barrow, director-general of the Private Sector Operations Department at the ADB, pointed out.
“B Grimm is a pioneer of renewable energy and low-carbon growth in Thailand and increasingly across the region, and the ADB is honoured to be its long-term partner in this effort,” he said.
Furthermore, the issuance will foster the development of the green-bond market in Thailand by showcasing international best practice for genuine green and climate bonds, he added.
The green-bond proceeds will be earmarked for B Grimm’s nine operational solar-power plants with a total capacity of 67.7 megawatts and seven plants of the same kind under construction – all in Thailand and with a combined capacity of 30.8MW.
This green bond represents the ADB’s third transaction with B Grimm, following a loan accord early this year for the expansion into renewable and distributed power generation markets throughout Southeast Asia and a subscription to initial-public-offering shares last year.
For the ADB, the debenture subscription is its second green-bond investment.
In 2016, it subscribed to an issuance to support the Tiwi and Makban geothermal power project in the Philippines – that country’s first green-bond offering.
Set up in 1993, B Grimm has become one of Thailand’s largest private power producers, with 33 plants in operation and a combined installed capacity of over 2,000MW.
According to the ADB, its investment in B Grimm’s green bond is consistent with the bank’s new “Strategy 2030”, which mandates that at least 75 per cent of the number of the ADB’s committed operations support climate-change mitigation and adaptation by 2030, with climate finance from its own resources reaching US$80 billion (Bt2.62 trillion) over 2019-2030.