Fri. Apr 12th, 2024

PTTEP and local bank launch Thailand’s first carbon credit-linked investment programme

PTTEP together with Krungthai Bank have jointly promoted sustainable finance through the introduction of a one-year carbon credit linked investment program for PTTEP’s liquidity management, which is the first of its kind in Thailand. Part of the returns will be used to purchase high-quality carbon credits, thereby contributing to the achievement of the greenhouse gas (GHG) reduction goal.

Sumrid Sumneing, Executive Vice President, Finance and Accounting Group at PTT Exploration and Production Public Company Limited (PTTEP), said that PTTEP is committed to achieving Net Zero GHG emissions by 2050, aligning with Thailand’s net zero pledge at COP26. To reach this aspirational goal, the company focuses on managing its exploration and production (E&P) portfolio, which constitutes its core business, and executes GHG emissions reduction plan from the production process. Additionally, PTTEP undertakes GHG offsetting initiatives such as forestation and blue carbon projects. The company recognizes that effective financial management and maintaining a robust capital structure can also be another approach contributing to this goal. By implementing the innovative carbon credit linked investment program, PTTEP aims to enhance liquidity management while using part of the returns from investments to purchase high-quality carbon credits and invest in projects that support GHG emissions management in the future. This groundbreaking financial approach represents the first instance of utilizing financial innovation to support a net zero GHG emissions target, playing a pivotal role in promoting mutual sustainable growth. Rawin Boonyanusasna, Senior Executive Vice President of the Global Markets Group at Krungthai Bank, emphasized the bank’s unwavering commitment to developing new capital market products and services that cater to the requirements of corporate clients and investors. Past accomplishments include the corporate digital bond, which facilitated trading in both primary and secondary markets, thereby ensuring inclusive, equitable, convenient, and secure access to corporate bond investments. Additionally, the bank provides risk management services for corporate clients. These offerings align with the sustainable development framework. On this occasion, Krungthai Bank leverages its extensive experience and expertise in investment management to enhance liquidity while embracing a sustainable growth agenda. Through a partnership with PTTEP, the bank introduces the carbon creditlinked investment program, which marks a significant milestone as it represents the first-ever utilization of financial innovation in Thailand to manage investments for clients, concurrently pursuing investment returns and the organization’s GHG emissions reduction goals. The bank will assist PTTEP in the acquisition of additional carbon credits, contingent upon PTTEP achieving the GHG reduction key performance indicators (KPIs). This collaborative effort contributes to Thailand’s targets of achieving carbon neutrality by 2050 and net zero emissions by 2065. 

 

“Krungthai Bank and PTTEP have achieved yet another significant milestone in financial innovation within the Thai capital market. Building on the success of revolutionizing investment in the country with Asia’s first digital corporate bond and ESG-Linked Cross Currency Swap, we reaffirm our commitment to conducting business with a strong focus on ESG (Environmental, Social, and Governance) principles. This collaboration with PTTEP further solidifies our position as a leading provider of ESG financial solutions, continuously developing new financial products and services that address the United Nations Sustainable Development Goals (SDGs), particularly SDG 13: Climate Action. Our aim is to drive sustainable growth for both our business and the Thai economy, aligning with our vision of ‘Growing Together for Sustainability’,” said Rawin.

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