EGAT Pioneers Thailand's Green Finance Revolution with Historic Sustainability-Linked Bond

 

In a watershed moment for Thailand's sustainable finance landscape, the Electricity Generating Authority of Thailand (EGAT) has announced plans to issue the country's first Sustainability-Linked Bond (SLB), marking a transformative step in the nation's journey towards carbon neutrality.

 

The pioneering 2 billion baht five-year bond, scheduled for offering on 11-12 September, represents far more than a financial instrument—it embodies Thailand's commitment to environmental stewardship and sustainable development.

 

As the first state enterprise to embrace this innovative funding mechanism, EGAT is lighting the path for others to follow.

 

"We are laying the foundation of sustainability for Thailand," declared EGAT leadership during the recent roadshow presentation. "We hope EGAT's steps today will spark inspiration and create confidence for other state enterprises to see the potential of financial mechanisms in driving the country towards a low-carbon economy and society."
 

 

 

The significance of this moment cannot be overstated. Unlike traditional bonds, EGAT's SLB directly links financial conditions to measurable sustainability targets, creating a powerful alignment between capital markets and environmental objectives. 

 

This represents a fundamental shift in how infrastructure development can be financed whilst ensuring accountability for climate commitments.
 

 

 

EGAT's role as Thailand's primary electricity generator places it at the heart of the nation's energy transformation. 

 

 

Managing the country's power grid—a sector responsible for significant carbon emissions—the utility recognises its pivotal responsibility in achieving Thailand's ambitious targets of Carbon Neutrality by 2050 and Net Zero by 2065.

 

"As the national electricity generating authority, we play a crucial role in transitioning the electricity business sector towards a sustainable low-carbon society," the utility emphasised. 
 

 

The utility's approach balances three critical missions: maintaining grid security, preserving the country's competitive edge through appropriate electricity pricing, and safeguarding communities and the environment.

 

 

This balanced approach reflects hard-learned lessons from global energy transitions.

 

Rather than rushing headlong into renewable energy adoption without adequate preparation, EGAT is methodically designing generation and transmission systems capable of seamlessly integrating diverse renewable energy sources whilst maintaining reliability and affordability.

 

The bond offering has garnered significant institutional support, with the Public Debt Management Office highlighting the milestone's broader implications. 

 

"It's gratifying that EGAT is the first Thai state enterprise to announce sustainable fundraising and issue an SLB with clear sustainability indicators," officials noted, emphasising how this aligns with national greenhouse gas reduction goals.
 

 

 

The timing is particularly poignant given EGAT's historical significance as a financial innovator. In 1972, EGAT issued Thailand's first state enterprise bond, raising 50 million baht that was oversubscribed within just two days. 

 

 

Remarkably, His Majesty King Bhumibol Adulyadej (Rama IX) subscribed to one bond worth 1,000 baht, later describing it as a "gift of encouragement" to EGAT—a gesture that remains a source of immense pride for the organisation.

 

Today's SLB represents a similarly pioneering spirit, but with stakes that extend far beyond corporate finance. The bond's proceeds will support EGAT's comprehensive sustainability strategy, including expanding renewable energy capacity, developing low-carbon technologies, and enhancing grid flexibility to accommodate intermittent clean energy sources.

 

For institutional investors, the SLB offers an opportunity to generate returns whilst contributing to Thailand's sustainable future.

 

The bond's structure ensures that financial performance remains directly tied to environmental outcomes, creating a powerful incentive structure that benefits all stakeholders.

 

EGAT's robust 2024 financial performance provides a solid foundation for this ambitious undertaking.

 

The utility reported impressive total revenue of 719.6 billion baht, demonstrating its substantial scale as Thailand's primary electricity generator. Operating profit reached 100.3 billion baht, while net profit climbed to 53.4 billion baht—a steady 1.5% increase from 2023's 52.6 billion baht.

 

These figures underscore EGAT's financial stability and operational strength, providing confidence to potential bond investors.

 

The utility's consistent profitability, with net profit margins exceeding 7%, reflects efficient operations and sound financial management—critical factors that support the credibility of its sustainability commitments.

 

The strong financial foundation positions EGAT well to execute its comprehensive sustainability strategy funded through the SLB proceeds, including expanding renewable energy capacity, developing low-carbon technologies, and enhancing grid flexibility to accommodate intermittent clean energy sources.

 

 

The broader implications extend beyond EGAT's corporate boundaries. As Thailand navigates the complex transition towards sustainable development, the success of this SLB could catalyse a new era of green finance, encouraging other state enterprises to adopt similar mechanisms and accelerating the country's progress towards its climate commitments.

 

"We firmly believe in sustainable energy transition under three main pillars," EGAT concluded, "caring for electricity system security, maintaining the country's competitive capability especially regarding electricity prices, and looking after society, communities, and the environment. These three factors must be managed in balance."

 

As Thailand stands at this crucial juncture between traditional energy systems and a sustainable future, EGAT's Sustainability-Linked Bond represents more than innovative financing—it symbolises hope, determination, and a commitment to leaving a better world for future generations.

 

The bond's success will be measured not merely in financial returns, but in the carbon emissions avoided and the sustainable prosperity it helps create for the Thai people.

 

 

 

NOTE: Interested institutional investors can find detailed information in the prospectus at www.sec.or.th or contact Krungsri Bank at 022-963-999. The bond subscription period is scheduled for 11-12 September 2025, with issuance on 15 September 2025.