Description: 

The Program will help transform Thai power sector by supporting private sector participation to set up some of the first megawatt scale projects in two low-carbon technologies with the potential to contribute in gigawatt scale.

Background:

Despite a natural endowment of world-class renewable energy resources, Thailand’s RE sector remains relatively unexploited. Progress has been made in hydropower (5 percent of total generation capacity installed) and biomass power (1.7 percent) but the wind and solar sectors have less than 10MW of grid-tied capacity installed.

Thailand has an excellent solar resource and good experience with micro-scale PV solar home systems, but the development of the grid-tied, megawatt scale solar sector is still in an early stage of development. Thailand has many regions with reasonable wind conditions. Thailand has class 3 wind areas along the southern coastline and the north, where average wind speeds is around 6.4 m/sec. the total estimated potential is 1.6GW, but now only 1 MW has been developed and owned by the public sector. In the long term, the government will have enough incentives and tariff add-ins to support RE sector, but in the short term, IFC will facilitate private sector investment.

Objectives and Outputs:

The Project will have high development impact on the Thai solar market by supporting a small Thai developer with its further solar farm licenses. This will create a replicable model for the Sponsor and local/regional solar IPP developers. The Project will promote private sector investment in the early stage of development of PV sector in Thailand. In addition, substituting thermal power expansion with zero-emission renewable energy will lead to less carbon-intense economic development, and 4,785 tons CO2 will be avoided per year per project. There will be more employment opportunities created in rural areas of Thailand.

The Program represents an IFC initiative to accelerate private sector participation in RE, and in particular, in the more challenging solar and wind sectors in Thailand. These two sectors have higher capital costs. The lack of experience in Thailand increases the perceived risks and adds to the high initial development costs experienced by pioneer projects. The Program aims to target and apply CTF funds to support private sector solar and wind projects and will address existing market barriers through advisory services to catalyze accelerated growth of these markets and ultimately transform the RE sector in Thailand.

The Program will focus on solar and wind technologies, each of which has significant potential for gigawatt scale in Thailand. Transformation of these sectors will potentially have a material impact on the GHG emission intensity of Thailand’s power sector. In each case, by supporting the rapid development and construction of some early pioneer solar and wind projects, the Program will have a substantial demonstrational and transformative role. Solar power is currently expensive, but cost reductions are in the sector and the potential for scale with Thailand’s huge solar resource. Wind power offers the potential for rapid generation capacity expansion once the initial projects succeed.

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.

IFC Project Portal

Project Details
Project DocumentProposed Decision
Approved on June 2, 2010 (Approved Decision)
Approved amount(s):
USD 40.0 million