Farah Hussain

September 27, 2019

ASEAN Capital Markets Initiatives for Climate Change Mitigation and Adaptation

Fighting Climate Change and

Strengthening Resilience

ASEAN: Highly vulnerable to climate change

1

Source: Germanwatch (2018)

Source: IMF Southeast Asia Climate Change and Greenhouse Gas Emissions

Climate Risk Index Ranking (1998-2017)GHG Emission Trends

Between 1990 and 2010, emissions of carbon

dioxide increased faster in Southeast Asia than

anywhere else.

Reliance on coal is increasing, threatening to

overshadow all progress on GHG emission

reductions elsewhere

Deforestation significant driver of greenhouse gas

emissions in the region

Paris agreement commitments

2

● Indonesia: 29% reduction in emissions by 2030

● Malaysia: 35% reduction in emissions intensity of GDP by 2030 relative to emissions intensity of GDP in

2005

● Thailand: 20% reduction in emissions by 2030

● Vietnam: 8% reduction in emissions by 2030

● Philippines: 70% reduction in emissions by 2030

3Source: The ASEAN Post

Climate-smart investment required

4

Philippines

New green buildings, waste,

and transport will see

investment of $57 billion, $2

billion and $41 billion,

respectively

Indonesia

Investments in for low-

carbon, resilient ports, rail,

roads estimated at nearly

$20 billion

Construction of new green

buildings will require

almost $209 billion

Vietnam

Transportation

infrastructure needs of

$571 billion by 2030

New green buildings

represent an almost

$80 billion investment

opportunitySource: IFC

Capital markets focusing on issues concerning sustainable finance

5

● Securities regulators are taking actions to align capital markets with the needs of the future via the SDGs

and the Paris Agreement

─ Engaging a broad spectrum of investors

─ Facilitating investment: directing capital via dedicated financial products to where it can make most

significant contributions

─ Strengthening corporate sustainability-related disclosures

─ Clarifying investor duties on sustainability

─ Building market capacity and expertise on sustainability

ASEAN Capital Markets Forum

6

ASEAN Green Bond Standards

Key features:

● Eligible Issuers must have

geographic/economic link to

the ASEAN region

● Ineligible Projects: Fossil fuel

power generation projects

● Issuers required to disclose

information throughout tenure

of bond on a website

● Frequent periodic reporting

encouraged

ASEAN Green/ Social/ Sustainability Bonds/Sukuk

7

Country Type of bond Issuer Amount

(million)

Issue date

1 Malaysia Green PNB Merdeka Ventures Sdn Bhd MYR 690

MYR 445

29 Dec 2017

28 June 2019

2 Malaysia Green Segi Astana Sdn Bhd MYR 415 8 June 2018

3 Singapore Green Sindicatum Renewable Energy

Co Pte Ltd

INR2,500 19 Jan 2018

4 Malaysia Green UiTM Solar Power Sdn Bhd MYR 222 27 Apr 2018

5 Singapore Green Sindicatum Renewable Energy

Co Pte Ltd

PHP 1,060.2 9 August 2018

6 Thailand Sustainability Kasikornbank Public Company

Limited

USD 100 30 Oct 2018

7 Thailand Green B. Grimm Power Public

Company Limited

THB 5,000 20 December 2018

ASEAN Green/ Social/ Sustainability Bonds/Sukuk

8

Country Type of bond Issuer Amount

(million)

Issue date

8 Philippines Green AC Energy Finance International Limited USD 300

USD119

29 Jan 2019

12 Feb 2019

9 Philippines Green Rizal Commercial Banking Corporation PHP 15,000 1 Feb 2019

10 Malaysia Green Pasukhas Green Assets Sdn Bhd MYR200 28 Feb 2019

11 Philippines Sustainability Rizal Commercial Banking Corporation PHP8,000 4 June 2019

12 Malaysia Green Telekosang Hydro One Sdn Bhd MYR470 6 August 2019

13 Malaysia Green Telekosang Hydro One Sdn Bhd USD 120.00 6 Oct 2019

14 Thailand Green BTS Group Holdings Public Company

Limited

THB 13,000 24 May 2019

Malaysia

Guidelines on Sustainable and Responsible Investment (SRI) Funds

9

Technical working group to develop

green finance market in Malaysia

MalaysiaFirst green sukuk in the world: Tadau Energy

10

● MYR 250 m green sukuk to finance a 50MW solar

photovoltaic power plant in Sabah, with two 21-year

power purchase agreements with Sabah Electricity

● Issued on July 27, 2017

● Issued under the SRI sukuk framework

● Rated AA3 by RAM Ratings

● Second Opinion by the Center for International

Climate and Environmental Research (CICERO) –

Dark Green

● Tenures from 2 to 16 years

● The scheduled commercial operation dates under

the two PPAs are June 30, 2017 and March 31, 2018

respectively

Indonesia

First sovereign green sukuk in the world

11

● Mandatory annual sustainability report

● Financial Services Authority (OJK) releases financial

services roadmap

● Requirement for FIs, issuers and public companies to

prepare annual sustainability report.

IssuerPerusahaan Penerbit SBSN Indonesia

III

Size US$ 1.25bn

Date February 2018

Maturity 5 yrs

Use of Proceeds Climate and environment-related

IndonesiaFirst domestic green bond

12

IssuerPT Sarana Multi Infrastruktur

(Persero)

Size IDR500bn

Maturity Maturity 3 yrs & 5 yrs

Tranche SizeIDR251.5bn (3 yrs) &

IDR248.5bn (5 yrs)

Coupon Rate

7.55% (3 yrs) & 7.80% (5 yrs)

Use of Proceeds LRT and

Mini Hydro Power Plant

Demand IDR978bn

Use of Proceeds LRT and Mini Hydro Power Plant

Singapore

• Sustainable Bond Grant

13

● Singapore Exchange Limited requires all listed

companies to report on sustainability, on a “comply

or explain” basis, with effect from financial year

ending on, or after, 31 December 2017.

• SEADRIF: Regional catastrophe risk pool

Philippines

14

Guidelines on the Issuance of Green

Bonds Under the ASEAN Green Bonds

Standards

RCBC issued the first PHP-denominated ASEAN

Green Bond on 01 Feb 2019 for PHP 15 Billion

(just under USD 300 MM)

IFC Invests $150 Million in Green Bonds in

Philippines issued by BDO, the largest bank

in the country

First Asian Climate Bond Issued by Philippines Geothermal Company

PhilippinesBuilding resilience to climate risk

15

● Philippines is among the world’s most disaster-prone countries

with high exposure to tropical cyclones and earthquakes.

● US$3.5 billion in asset losses assessed annually from

typhoons and earthquakes

● The Philippines obtained a parametric catastrophe risk

insurance policy in 2017, providing US$206 million of cover for

earthquakes and typhoons. This was the first reinsurance

agreement with a government agency.

● In the second year of the program in 2018, the cover increased

to $389 million.

Impact

● The transaction provides rapid liquidity post disaster to the

government, from a AAA rated counterparty, to better support

emergency response and maintain essential services until

additional resources become available.

ThailandGreen Bonds

16

● ADB Invests 5 Billion Thai Baht in B.Grimm Power’s

Green Bond to Develop Clean Energy in Thailand

● The 5- and 7-year green bonds will finance

renewable energy projects in Thailand

TMB bank has largely offered the seven-year green

bonds to IFC. The US$60 million bond proceeds

will be used to finance climate-related projects and

contribute to sustainable development

Vietnam

17

Source: Climate Bonds Initiative

In summary

18

● The ASEAN region’s economies must grow, while reducing greenhouse-gas intensity and addressing

climate resilience.

● Several economies in the region are making progress in advancing green growth and low-carbon

innovation, which is attracting large private investment.

● The capital markets have the potential to unlock billions of dollars worth of investment opportunities.

● Regulators have an important role to play in removing barriers and creating an environment in which

innovation can thrive.

THANK YOU

Contacts

19

Farah Hussain Senior Financial Officer

Financial Advisory and Banking

The World Bank Treasury

(202) 473-2540 fhussain@worldbank.org

http://treasury.worldbank.org/

Disclaimers

20

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