Impact Policy Tracker Policy

Thailand’s Sovereign Sustainability-linked Bond



As part of Thailand’s efforts to align sovereign financing with its national climate commitments, and building on the country’s Sustainable Financing Framework, the Public Debt Management Office (PDMO) issued Thailand’s first sovereign Sustainability-Linked Bond (SLB) in 2024, becoming the first country in Asia to do so. The THB 30 billion (approximately USD 957 million) bond is tied to two climate-related performance indicators: reducing greenhouse gas (GHG) emissions by 30% by 2030 and accelerating the adoption of zero-emission vehicles (ZEVs).

The SLB performance targets are directly connected to Thailand’s unconditional Nationally Determined Contribution (NDC) and the country’s 30@30 electric-mobility policy. If Thailand fails to meet either SPT by 2030, the coupon rate will increase by 2.5 basis points per unmet target; conversely, meeting the targets results in an equivalent coupon reduction.

Highlights

  • First sovereign SLB in Asia: Thailand became the first country in Asia - and the third globally, after Chile and Uruguay - to issue a sovereign sustainability-linked bond. The issuance attracted strong investor demand, with bids exceeding THB 55 billion (~USD 1.75 billion), prompting an upsizing from the initial THB 20 billion (~USD 638 million) target to THB 30 billion (~USD 957 million).

  • Linking Sovereign Finance to a Strategic Decarbonisation Sector: Thailand’s sovereign SLB explicitly links financing conditions to performance in the transport sector, a key driver of emissions. In 2023, the transport sector accounted for 33% of national CO2 emissions, making electrification a critical mitigation lever. By tying the bond’s KPIs to greenhouse gas reductions and the accelerated adoption of zero-emission vehicles (ZEVs), the SLB channels sovereign financing incentives towards a sector central to Thailand’s decarbonisation pathway.

Government’s Role:
Market Participant


Country:
Thailand

Policy Type:
Sustainable Bonds

Year: 2024

Responsible Institution:
Ministry of Finance of Thailand

Additional information:
Kingdom of Thailand's sustainability-linked bond progress report

Sustainable Bonds

What are Sustainable Bonds?

Within the set of financial instruments that fall under the impact investing umbrella, Green, Social, Sustainability, Transition, Blue, Gender and Sustainability-Linked bonds (often collectively referred to as GSS+, ESG, thematic, labelled or sustainable bonds) have gained prominence in recent years for their potential to help bridge the SDG financing gap. Governments, especially in emerging economies, play a catalytic and pivotal role in scaling these instruments. By issuing sustainable bonds, national, regional, and local public entities mobilise capital for long-term investments with broad social and economic benefits, which often fall outside the scope of conventional, profit-driven financing.

Public issuers are not only large players in terms of volume, representing approximately 50% of sustainable bond issuances annually since 2020, but also critical market enablers. Government-led issuances serve as signals of policy commitment to sustainability, helping to build investor confidence and drive demand from both domestic and international capital markets. Moreover, public sector issuances typically align with international standards and best practices, such as the ICMA principles, thereby setting a benchmark for transparency, impact reporting, and accountability. This leadership lowers the perceived risk for other issuers and facilitates replication by subnational governments, state-owned enterprises, and even private entities. Thanks in part to these public sector efforts, the sustainable bond market continues to grow rapidly. In 2025, issuance of sustainable bonds is projected to reach USD 1 trillion, accounting for 11% of the global bond market, a milestone that reflects both rising investor appetite and the enabling role played by governments in expanding this segment of sustainable finance.

For more information on sustainable bonds and their market trends, visit S&P Ratings “Sustainable Bond Outlook 2025”, Sustainable Fitch “Sustainable Finance Outlook 2025”