Bangkok--28 Mar--Fitch Ratings
The benefits of green bond financing to support climate-related and environmental projects were discussed at Fitch Ratings (Thailand) Limited's semi-annual investor briefing on the Global Economic Outlook and Thai Debt Market Trends - Green Bonds in Bangkok today. The conference also flagged Thailand's modest domestic growth outlook and large debt-funded corporate investments as among the risks in the medium term.
In his introduction, Mr. Vincent Milton, Managing Director at Fitch Ratings (Thailand), noted that green bonds account for less than 1% of the global bond market, with USD280 billion outstanding. However, Fitch expects increased green bond issuance from the country's utilities, energy and bank sectors. Green bond issuance should be supported by greater awareness of the potential effect of environmental, social and governance risks in Thailand. The development of green bond financing in Asia was also discussed by Ms. Natalia Bogomolova, Regional Industry Manager of the Financial Institutions Group, East Asia Pacific, at the International Finance Corporation.
Global power generation from renewable sources has almost quadrupled in the last decade, helped by government subsidies, according to Mr. Obboon Thirachit, Director of Fitch's corporate ratings team. The significant decline in the cost of installing solar and wind power should support continued growth in renewable energy in Thailand, with less reliance on government incentives. Currently, wind and solar photovoltaic projects contributed around 3% of Thailand's total installed capacity, with the government targeting this to increase to 15% over the next 20 years.
Dr. Yunyong Thaicharoen Chief Economist and First Executive Vice President, Economic Intelligence Centre, at Siam Commercial Bank Public Company Limited, presented on the economic outlook for Thailand's and the world as well as the effect of higher US interest rates.
The conference was attended by more than 100 corporate treasurers and bankers, insurers, asset managers and regulatory officials.