At a Glance 

• Partners: The Kingdom of Thailand, acting through the Ministry of Finance and its Public Debt Management Office (PDMO)  
• Investment type: Sustainability-Linked Bond 
• Key business benefit: Creates a replicable model for supporting governments in embedding measurable environmental targets into sovereign debt frameworks; demonstrates that biodiversity-related KPIs can be integrated into large-scale sovereign financing, potentially encouraging further market development. 
• Key outcomes: THB25 billion raised (~US$795M); 15-year-8-month tenor; final orderbook of ~THB36.3 billion; Two KPIs for the Sustainability-Linked Bond include (1) reducing Thailand’s net greenhouse gas (GHG) emissions by 47% by 2035 compared to 2019 levels and (2) increasing Thailand’s terrestrial and inland water protected areas and other effective area-based conservation measures to 30% of total national land area by 2030. This makes Thailand the first sovereign issuer in Asia Pacific to incorporate a nature-related indicator into a Sustainability-Linked Bond. 

The Opportunity 

Thailand’s first Sustainability-Linked Bond was issued in 2024 through its Sustainability-Linked Finance Framework, supported by institutions including the Asian Development Bank and Standard Chartered, as the only international bank. This first SLB was tied to Thailand’s national climate targets focused on emissions reductions and electric vehicles. Following strong demand for Thailand's Sustainability-Linked Bond, there was an opportunity for a second issuance and the opening to embed a nature KPI into the new SLB, a first for a sovereign issuer in Asia.  

The Approach 

Working with the Ministry of Finance & Public Debt Management Office of Thailand, Standard Chartered served as Joint Sustainability Structuring Bank, Joint Bookrunner and Joint Lead Arranger, supporting the drafting of the updated framework and leveraging its experience in nature and climate finance to advise on the KPIs and Sustainability Performance Targets (SPTs) included in the SLB. The KPIs were structured to directly support Thailand’s national goals. The KPIs for the SLB were established as (1) reducing Thailand’s net greenhouse gas (GHG) emissions to 152 million tonnes of CO₂ equivalent (MtCO₂e) by 2035, representing at 47% cut compared to 2019 emissions and (2) increasing the percentage of Thailand’s terrestrial and inland water areas covered by protected areas and other effective area-based conservation measures (OECMs) to at least 30% of the country’s total area by 2030. 

The transaction was supported by healthy investor demand which saw a final orderbook of THB 36.3 billion, allowing the issuer to fully utilise the greenshoe to upsize from an initial size of THB 15 billion to THB 25 billion, representing a 1.45x oversubscription. The characteristics of SLBs are designed to vary based on whether the issuer meets these KPIs and SPTs, providing incentives to achieve targeted goals. In this case, the SLB includes a symmetric financial incentive mechanism: the interest rate may increase or decrease by 2.5 basis points for each KPI, depending on whether the relevant Sustainability Performance Target is met. 

This SLB directly supports Thailand’s sustainable development by aligning its national debt with its long-term environmental goals. Standard Chartered supported the Kingdom’s first Sustainability framework in 2020 and through this latest issuance, continues to support its implementation. 

Value Created 

For Standard Chartered, the transaction confirms its expertise in structuring innovative sovereign finance solutions that respond to growing investor interest in climate- and nature-linked instruments. It also strengthens the bank’s positioning as a partner to governments seeking to align their financing strategies with national environmental priorities and evolving market expectations. Through this experience, Standard Chartered is well placed to support other sovereign issuers exploring similar approaches. 

For Thailand, the transaction demonstrates how sovereign financing can support national climate and biodiversity priorities while attracting capital from domestic and international investors. By linking the bond’s financial terms to measurable emissions-reduction and conservation targets, Thailand has strengthened accountability for its environmental commitments and created a framework that could support future sustainable finance transactions. The strong investor demand also signals market confidence in Thailand’s sustainability-linked financing approach. 

For climate and biodiversity outcomes, the bond links Thailand’s financing conditions to measurable progress on emissions reductions and the conservation of terrestrial and inland water areas. If achieved, these targets could contribute to stronger climate action, improved protection of natural ecosystems and progress towards Thailand’s commitments under the Paris Agreement and the Kunming-Montreal Global Biodiversity Framework. 

Why It Matters / Key Takeaways 

Standard Chartered has created a blueprint for embedding nature and climate targets within a Sustainability-Linked Bond. Its strong investor demand may encourage other governments and financial institutions to explore similar structures for terrestrial, freshwater, coastal and marine conservation objectives. 

Relevant global targets

• Global Biodiversity Framework Target 3 (30x30 / area-based conservation: Targets 14 and 19 (mainstreaming and resource mobilisation) 

References:

1. https://www.adb.org/news/adb-supports-asia-first-sovereign-sustainability-linked-bond-thailand