In this research note, we assess Thailand’s updated NDC and related emission reduction targets. More investment is needed to decarbonise the economy, and capital markets will continue to play a key role in financing the transition.
The paper examines Thailand’s landmark Sustainability-Linked Bond (SLB), now the largest of its kind globally. We evaluate recent emissions and zero-emission vehicle registrations against performance targets. While the SLB has been a market success, our analysis finds the estimated option value is limited.
We also explore how performance-linked bonds tied to NDCs could evolve further and outline a proposal for a Thai transition linker. This instrument is designed to embed transition progress into bond pricing. If well structured, it could lower Thailand’s cost of capital while offering investors a hedge against a failed transition scenario.
