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Thai group eyes ASEAN solar plants after first 'green bond'

B. Grimm president looks for opportunities in Malaysia, Cambodia and Philippines

A solar plant in Phetchaburi province, Thailand. B. Grimm looks to complete 16 solar farms in Thailand, along with the company's heavy investment into renewable energy in Vietnam.   © Reuters

BANGKOK -- The power generating arm of Thailand's oldest industrial group, B. Grimm, has issued 5 billion baht ($152 million) in "green bonds" to raise funds for further investment in its renewable energy business.

"We invested a lot in Vietnam, and we are now looking for business opportunities in Malaysia, Laos, Cambodia and the Philippines," said Preeyanart Soontornwata, president of B. Grimm Power.

The Asian Development Bank bought the entire offering, Preeyanart said.

"We are in talks with ADB for possible loans in the future as well as issuing more green bonds, as it is seen as the most competitive fundraising strategy at this moment," she added.

About 3 billion baht from the sale goes toward refinancing earlier debt, while the rest will be used to build 16 solar farms in Thailand with total generating capacity of 97 megawatts, she said.

Green bonds raise money for climate and environmental projects. The bonds and their issuers need certification by the Climate Bonds Initiative, an international not-for-profit organization that works to mobilize the $100 trillion global bond market to fight climate change.

About seven of the 16 solar farms in Thailand remain under construction, with some due to begin commercial operations next year.

The company turned to green bonds as a new fundraising tool that provides lower costs than loans or normal corporate bonds, Preeyanart said.

The bonds' coupon rate was 3.6%, Preeyanart said, well below the company's average funding costs of around 5.5%. Interest rates on Thai corporate debt maturing in five to seven years range from 4% to 7%, depending on issuers' ratings.

"It is very hard to be endorsed by the Climate Bonds Initiative," she said. "And after our green bond has been certified, we hope that it will be easier for us to issue new series of bonds in the future to raise funds for new projects."

B. Grimm Power's debt-to-equity ratio of 0.5 lets the company take on more debt for additional renewable energy products, and the company is focusing on Southeast Asia, Preeyanart said.

The ADB already has lent $235 million this year to B. Grimm Power to develop renewable energy capacity in members of the Association of Southeast Asian Nations.

The company's investment in Vietnamese renewable projects is part of the plan to have total power generating capacity of 5,000 MW in 2021, up from the current 2,045 MW.

B. Grimm continues investing in Vietnam, having acquired an 80% stake in a 257 MW solar plant project in the south-central coastal province of Phu Yen for $32.5 million. The company also signed a $420 million deal to develop a 420 MW solar power project -- the biggest in ASEAN -- in Tay Ninh Province, with commercial operation due to start next year.

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