BCPG and KBank Collaborate to Launch Thailand’s First ‘Bonds Plus Carbon Credit’, Offered to Institutional Investors, Pioneering Carbon Credit Market Development through Innovative Fundraising

Mitihoon    BCPG has partnered with KASIKORNBANK to issue Thailand’s inaugural “Bonds Plus Carbon Credit “, offered to institutional investors, aiming to develop the carbon credit market through an innovative way of fundraising. With a total issuance amounting to THB 2,000 million, these fixed rate bonds offer a unique feature as investors could choose a bond complimentary to either receive carbon credits certified by TGO or a renewable energy certificate (REC) certified according to I-REC standards.

BCPG Public Company Limited, a leading renewable energy power generation business in the Asia Pacific region, has issued bonds worth THB 2,000 million on June 26, 2024. These bonds, arranged by KASIKORNBANK Public Company Limited, have tenures of 3 and 5 years and are offered to leading institutional investors in Thailand. These bonds are unique, providing investors not only with fixed coupon returns but also the option to receive selected certified ESG complimentary. Investors can choose, as bond complimentary, either carbon credits certified under the Thailand Voluntary Emission Reduction Program (T-VER) by the Thailand Greenhouse Gas Management Organization (Public Organization)  or renewable energy certificates (REC) certified by The International REC Standard Foundation.

These carbon credits or renewable energy certificates, produced from BCPG’s solar power project, can be used to offset greenhouse gas emissions, aiding in achieving carbon neutrality as per the National Environmental Strategy Plan. Additionally, they can be traded in the secondary market, enhancing the liquidity of the carbon credit trading market in Thailand and thus promoting market development.

Mr. Niwat Adirek, Chief Executive Officer and President, BCPG Public Company Limited, stated that while the world is paying more attention to sustainability, BCPG is committed to being a leader in integrating environmental responsibility with financial innovation. This transaction reinforces our commitment to “Create a sustainable green world” in line with BCPG’s vision. BCPG is also a founder of the Carbon Markets Club, a carbon credit platform that encourages knowledge sharing, equipped with carbon emission calculation and trading tools, offering an opportunity for all sectors to participate in solving global warming issues. By providing carbon credits to investors, this initiative encourages leading Thai investors to understand more about carbon trading in the secondary market. BCPG achieved its goal of carbon neutrality in 2022  and aims to become a Net Zero Emissions organization within 2030.

Mrs. Natarika Wayuparb Nitiphon, Deputy Executive Director and Acting Executive Director of Thailand Greenhouse Gas Management Organization (TGO) congratulated BCPG, KASIKORNBANK, and all investors on the success of this debenture transaction.  This initiative enabled TGO to successfully transfer TGO accredited  Carbon Credit (under T-VER program) from BCPG’s Carbon Credit Account, as project developer, to Investors’ Carbon Credit Account, as complementary to bond investment.   We believe that this transaction will inspire other companies in Thailand to explore creative GHG remission projects and lead the country to achieve national goals.

Since the establishment of Thailand Voluntary Emission Reduction Program (T-VER) by TGO

in 2014, the voluntary carbon credit market in Thailand has made a continuous progress. Over 438 projects are registered under T-VER, 169 projects of which have been accredited carbon credit, with  greenhouse gas reduction/sequestration of 19,537,269 tonnes of carbon dioxide equivalent per year (tCO2eq/year). Since 2016, approximately 3,422,956 tCO2eq, valued at around THB 299 million, have been traded.  We believe that not only does voluntary carbon market helps support the Greenhouse Gas Remission, but it also helps generate other ESG benefits such as larger green and bio diversified spaces for community, pollution reduction, income generation for the community, and waste or agricultural and household leftover value creations.

TGO believes that the carbon credit market not only helps reduce greenhouse gases but also generates economic, social, and environmental benefits. These include increased green spaces and biodiversity, reduced environmental pollution, additional income for communities, and added value to agricultural and household waste.

Mr. Pipit Aneaknithi, President, KASIKORNBANK Public Company Limited, has affirmed the bank’s aspiration of becoming the leader in ESG practices among banks in Southeast Asia. Aiming to achieve net-zero greenhouse gas emissions from its operations by 2030, the bank is committed to extending its services beyond financial offerings to support Thailand’s emissions reduction efforts though our ongoing commitment toward sustainability via Capital Markets Products Offering such as investment, hedging and fund raising products. Therefore, this transaction marks a key milestone for KASIKORNBANK as both arranger and cornerstone investor of BCPG debentures, in achieving yet another sustainability goals.  We have also invited leading institutional investors to participate and set up their own carbon credit accounts with the TGO. The transaction, hence, helped foster knowledge sharing on ESG principles, encompassing related carbon credit tax and accounting treatment.  For KASIKORNBANK, Carbon credits acquired as complimentary BCPG debentures will be utilized to offset our greenhouse gas emission from our operation.

Mr. Songpol Chevapanyaroj, Secretary General, Thailand’s Government Pension Fund (GPF) highlighted GPF’s ongoing commitment to integrating ESG (Environmental, Social, and Governance) aspects into its operations. GPF has consistently supported issuers of ESG debt instruments in the market and embraced new innovations in the financial markets. GPF is proud to participate in this pioneering financial innovation project, merging investment transactions in the capital market with the development of the carbon credit market. Additionally, GPF plays a pivotal role by reselling the carbon credits it receives in the secondary market. This initiative not only enhances liquidity in the secondary market but also contributes to broader environmental sustainability goals.

Mr. Xiaobo Li, Chief Executive Officer, Industrial and Commercial Bank of China (Thai) PCL or ICBC (Thai), a subsidiary of ICBC group – a leading global commercial bank, highlighted that this transaction represents an important innovation in both debt capital and carbon credit markets. ICBC (Thai) is committed to supporting ongoing development in the capital market and ESG-related financial products. With global warming awareness, both investors and issuers increasingly share the same goals in making a positive environmental impact on their own parts. BCPG debentures signify an inaugural step towards fostering innovation while aligning the capital market with ESG considerations.

Mr. Sara Lamsam, Chief Executive Officer, Muang Thai Life Assurance Public Company Limited emphasized the company’s commitment to integrating sustainable development principles into its business operations. Muang Thai Life recognizes the significance of incorporating environmental, social, corporate governance, and economic (ESG) considerations for the benefit of all stakeholders. This investment transaction underscores Muang Thai Life’s dedication to sustainable practices and expands its investment opportunities. Moreover, it serves as a supportive measure towards advancing the development of Thailand’s carbon credit market, aligning with the company’s broader sustainability goals.