47448 - DCM BAY Green Blue Bond

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Summary of Investment Information

Project Number

47448

Company Name

BANK OF AYUDHYA PUBLIC COMPANY LIMITED

Date SPI Disclosed

Jun 15, 2023

Country

Thailand

Region

East Asia and the Pacific

Projected Board Date

Mar 29, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 18, 2023

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Mar 29, 2023
Signed : Apr 11, 2023
Invested : Jun 15, 2023

Sector

Commercial Banking - General

Project Description

The proposed investment is IFC’s subscription of up to US$400 million in a 7-year green and blue bond to be privately issued by Bank of Ayudhya Public Company Limited (BAY or the Bank), of which US$50 million will be dedicated to supporting the development of the Bank’s blue assets related to ocean-friendly projects as well as protecting clean water resources, with the remaining subscription amount dedicated to supporting the growth of the Bank’s eligible green assets (the Project). The entire bond will adhere to the International Capital Markets Association’s (ICMA) Green Bond Principles, with the blue portion also following IFC’s Guidelines for Blue Finance.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	400.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant expected Project-level outcomes are increased access to climate finance and blue finance. At the market level, IFC anticipates that this Project in Thailand, along with projects being currently pursued under this approach regionally, will catalyze private sector financial institutions to allocate capital to environmental challenges through the issuance of green/blue bonds.

Financial additionality will be through needed long-term financing to help improve BAY's asset liability management amid the challenging global environment. Non-financial additionality will be through knowledge, innovation, and capacity building, as IFC will support BAY in scaling its green finance portfolio for renewable energy, energy efficiency and other climate eligible projects and developing its blue finance portfolio.

E&S Category Rationale / Risks and Mitigation

The proposed project entails an IFC investment in a green and blue bond to be issued by Bank of Ayudhya (BAY or the Bank) to finance climate-related projects such as electric vehicles, solar energy efficiency and plastics recycling. The project will not support any coal-related activities or higher risk business activities that may involve (a) involuntary resettlement, (b) risk of adverse impacts on Indigenous Peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) significant Occupational Health and Safety risks. The proceeds from this bond will not be used for supporting business activities of BAY's subsidiaries. The project will support only medium/medium-low E&S risk sub-projects and has been categorized as FI-2 in accordance with IFC's Sustainability Policy. The applicable E&S performance requirements for the project include the IFC Exclusion List and national E&S laws, and application of the Performance Standard 2 to BAY's human resource practices. The main E&S risks and impacts of the project derive from the E&S risks associated with the project-supported activities and the Bank's capacity and systems in place to manage these risks. Typical E&S risks associated with the project may be related to labor and working conditions, E&S-related permits and approvals, occupational health and safety, pollution control and materials management, or supply chain related risks amongst others.

IFC will periodically disclose the names, locations and sectors for Category A sub-projects that have been supported by IFC investments through financial intermediaries, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of July 1, 2020.

BAY will disclose information about corporate or project finance climate-related sub-projects supported by the proceeds of this bond with the loan size of US$20 million equivalent. The Bank will disclose a summary of its updated ESMS on its website. IFC will monitor the Project's E&S performance through reviewing the annual E&S reports provided by the Bank and conducting site-based supervision of the project activities as needed.

The Bank has developed and implemented an Environmental and Social Management System (ESMS) that covers SMEs and has nominated E&S staff. For this project, BAY will be required to upgrade its ESMS to enable the screening out of higher risk transactions as well as review of eligible sub-projects under this project against the applicable E&S performance requirements. The Bank will also be required to retain appropriately qualified E&S specialists, where required. In addition, the Bank will be required to provide training on the updated ESMS for relevant staff involved in the implementation of the project. BAY has in place human resources practices and policies which are generally aligned with Performance Standard 2 on Labor and Working Conditions. BAY will disclose information about corporate or project finance climate-related sub-projects supported by the proceeds of this bond with the loan size of US$20 million equivalent. The Bank will disclose a summary of its updated ESMS on its website. IFC will monitor the project's E&S performance through reviewing the annual E&S reports provided by the Bank and conducting site-based supervision of the project activities as needed.

Contacts

For Inquiries About the Project, Contact

Bank of Ayudhya Public Company Limited
Duangkhae Khunviseadpong
EVP, Head of Strategic Assets and Liabilities Management Department
+66 (0) 2-296 5307
duangkhae.khunviseadpong@krungsri.com
1222 Rama III Road, Bang Phongphang, Yan Nawa, Bangkok 10120 Thailand
https://www.krungsri.com/bank/en/Contact/CU/ContactUs.html

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Upgrade ESMS, including arrangements for use of qualified E&S specialists, where required	06/30/2023
Develop a staff training plan on the upgraded ESMS	06/30/2023

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