COLOURFUL START
Bangchak Petroleum’s first-ever “green bond” proves a hit, selling out as soon as it was launched.
The first-ever “green bond” by SET-listed Bangchak Petroleum Plc (BCP), a majority state-owned oil refinery and retailer, proved a hit when it was launched yesterday.
The 3-billion-baht bond issue is intended to raise funds for investment in the company’s greenfield businesses.
President Chaiwat Kovavisarach said the green bond sold out immediately to six major insurance institutions.
They are Muang Thai Life Assurance, Thai Life Insurance, Bangkok Life Assurance, Ocean Life Insurance, Southeast Insurance and the Social Security Fund.
“It’s Bangchak’s first green bond in Thailand, which means the money will be invested in green businesses. It’s been rated ‘A-’,” Mr Chaiwat said.
The issue has been separated into two tranches — a 12-year bond at 4.72% interest and a 15-year bond at 5.05% interest.
Mr Chaiwat said Bangchak planned to invest 30 billion baht of its 90-billion-baht six-year business plan from 2015-2021 in green power and renewable energy.
“Bangchak plans to spend the 3 billion baht raised from the bond issue this year,” he said.
“On top of 2 billion baht in working capital, that will make for an investment budget of 5 billion for 2015.”
Mr Chaiwat said Bangchak also planned to build a solar power plant with generating capacity of 40-50 megawatts.
The solar plant is expected to be completed by next year.
Another investment will be a waste-to-power plant with capacity of 20-30 MW.
Mr Chaiwat said each megawatt of power made from renewable sources would cost 60-70 million baht.
Another green energy project of Bangchak’s will be a 100-million-baht geothermal power plant that will produce electricity from underground heat, with capacity of 30 MW.
The geothermal plant will be a joint venture, with Bangchak owning about 35%.
Mr Chaiwat said details of the project would be finalised this month and the names of partners announced.
The company also plans to issue a US$100-million “climate bond”, which is now undergoing a feasibility study with the Asian Development Bank.
In addition to green energy, Bangchak also plans to diversify into exploration and production in order to help generate sustainable revenue and offset falling revenue from volatile oil prices.
As a result, the company will set aside up to 50 billion baht out of its total six-year expenditure of 90 billion for oil and gas exploration and production.
BCP shares closed yesterday on the SET at 33.50 baht, down 75 satang, in trade worth 111 million baht.