Treasury supports EXIM BANK to sell Blue Bonds in baht.

The Treasury Department supports EXIM BANK in selling its first baht-denominated Blue Bond worth 3 billion baht at a fixed interest rate of 2.78% per year, hoping to raise funds for lending to marine conservation businesses, the Blue Economy, and a low-carbon society. Mr. Paopum Rojanasakul, Deputy Minister of Finance, said during the joint announcement of the issuance of environmental conservation bonds (Blue Bond) with Bank of Ayudhya and Government Savings Bank as underwriters that this is the first time for a Thai financial institution to issue a 3-year baht-denominated Blue Bond worth 3 billion baht with a fixed interest rate of 2.78 percent per annum, with ADB as a consultant for the preparation and certification of the Blue Bond issuance by DNV (Thailand) Co., Ltd., a world-class standard certification organization and rated AAA by Fitch Ratings, reflecting EXIM BANK's strong and stable financial position to raise funds for lending to businesses that conserve the marine and coastal environment, in li ne with Thailand's vision of 'IGNITE THAILAND' and the government's policy to drive sustainable development in all dimensions of the economy, society, and the environment, because doing business in the modern era, if focusing on ESG and taking care of the environment, will be promoted by banks and business partners on the world stage. And with lower financing costs, as 80 percent of global trade is transported by sea, UNCTAD estimates the global Blue Economy at around 2.5 trillion US dollars, while the World Economic Forum predicts that the world will achieve the Sustainable Development Goal on the conservation and sustainable use of the oceans, seas and marine resources (SGD 14) with approximately 175 billion US dollars of Blue Finance investment per year, while during 2015-2019, the actual investment was less than 10 billion US dollars per year, meaning that there is still a large GAP of almost 165 billion US dollars per year in pushing Blue Finance. Mr. Paophum added that ADB stated that Thailand's marine economy is worth 30 percent of GDP, covering many industries and accounting for 26 percent of total employment. Therefore, the government has always given importance to the conservation and sustainable use of marine resources. EXIM BANK's issuance of Blue Bond this time is considered a green financial innovation, helping to complement the green economy, combined with the blue economy, supporting Thailand's vision of 'IGNITE THAILAND' through cooperation between financial institutions to develop Thailand into a financial hub for sustainability. Mr. Rak Vorakitpokatorn, Managing Director of EXIM BANK, said that EXIM BANK is considered the number one bank in promoting Green Finance and Blue Finance after issuing environmental conservation bonds up to the present at 11.5 billion baht. Since 2022 onwards, it has issued Blue Bonds worth 3 billion baht. It is considered a good response from institutional investors and large investors, resulting in a subscription of 2.5 times the offering amount. This fundraising is for lending to business sectors such as hotels and marine tourism, fisheries, including aquaculture, wastewater management and treatment, marine waste recycling, and maritime commerce. EXIM BANK also develops new financial instruments, such as loans for environmentally friendly and marine resources-based businesses (Blue Economy) for entrepreneurs of all sizes, with a minimum interest rate of 3.85% per year and a maximum approval limit of 200 million baht. EXIM BANK aims to increase the proportion of sustainable loans from the current 37% to 50% of the total loan portfolio by 2027. The interest rate of 3.85% per year is the same as the soft loan of the Government Savings Bank. Therefore, it is ready to combine the sources of funds of the Government Savings Bank to take care of retail liquidity. Soon, it will launch the Green Hotel project with a budget of 5,000 million baht to promote the tourism business. Mr. Rak admitted that regarding the problem of the executives of E@ Company being accused by the SEC, Exim Bank had lent more than a billion baht to Thai Smile Company, a subsidiary, and admitted that there were no problems with bad debts, but had already set aside quality reserves. When considering lending using reference data from several standard agencies, from now on we will have to be careful and adjust the method of considering lending in depth, using more clear data search tools, while still aiming to grant loans of 190,000 million baht in 2024. -515- Thai News Agency Source: Thai News Agency