Description: 

The program represents an initiative of the ADB, as implemented in part by the Private Sector Operations Department (PSOD), towards accelerating the participation and scale-up of investments by the private sector, with particular focus on the development of utility-scale solar, wind, and WTE power generation projects.

Background:

The Government of Thailand (GoT), committed to climate change mitigation, has developed a National Strategy on Climate Change (2008-2012), and identified GHG reduction through clean technology as one of its core approaches through a comprehensive policy framework.

Having alternative energy is also a national agenda through encouraging production and indigenous renewable resource usages. The Electricity Generating Authority of Thailand (EGAT) Power Development Plan 2010 – 2030 (PDP) calls progressively decarbonized electricity supplies, clean energy to be added to the generation mix, complemented by conservation and efficiency gains. The goal of decarbonization requires all future fossil electric generation additions be completely offset by electricity from zero-carbon electric generation, coupled to an additional 25 percent decrease in GHG intensity. This requires neutralization from approximately 12,000 megawatts (MW) of coal-fired generating plants by 2030. The Ministry of Energy (MOE) is updating the RE Development Plan with a revised target for alternative energy use to increase to 25 percent of total energy consumption in 2022.

Objectives and Outputs:

These projects are expected to provide Thailand with a total capacity addition of approximately 520 MW while diversifying the primary energy mix and reducing GHG emissions.

The Program will support GoT’s objectives for alternative energy development and climate change mitigation, help implement clean energy projects, and catalyze expansion in solar, wind, and WTE sub-sectors. CTF funds may be structured as loans or guarantees alongside ADB. ADB will ensure all projects have funding from commercial banks, as local banks are more familiar with assessing credit risks.

Most projects will be financed on a project finance basis. Individual projects may benefit from the upfront financing of CERs by ADB's Carbon Market Initiative (CMI). The CMI team will work on the Clean Development Mechanism (CDM) component with Sponsors, parallel with the ADB financial assistance discussions. The CTF supported investments will help Thailand expand private sector investment in RE infrastructure.

By demonstrating the commercial viability of private sector utility-scale energy generation projects, the Program will bridge the gap between perceived and actual risks of investments in a new industry, and have spillover effects in subsequent RE power projects. It will also establish replicable business models and performance benchmarks for RE technologies in Thailand. The potential demonstrable effect added assurance for local FIs to lend to future RE projects, which in turn accelerate growth.

The completion of these projects will help Thailand achieve the target of having 20.3 percent of the primary commercial energy supply coming from alternative and renewable resources by 2022. A track record of investments will catalyze market transformation. Increase of private sector participation through project development and scale-up of will potentially lead to job creation. Improved air quality due to reduced pollutants emissions from coal-fired power plants, and a lower carbon footprint will bring healthier and more sustainable living condition for Thai people. Employment for local labor will increase.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

Project Details
Project Document | Independent Review | Extension of Approval | Proposed Decision
Sub-Project: Provincial Solar Power Project
Approved on May 24, 2012 (Approved Decision)
Approved amount(s):
USD 99.5 million
USD 500,000 (MPIS)