The Asian Development Bank has signed an agreement to provide a local-currency loan of up to 1.8 billion baht (US$55.2 million) plus $30 million from the ADB-administered Clean Technology Fund to Chaiyaphum Wind Farm Co to develop a wind power plant in the northeastern province.
"Wind energy provides a clean and sustainable source of electricity that will help to diversify the country's energy mix, strengthen energy security and reduce Thailand's reliance on fossil fuels," said Christopher Thieme, director of the ADB's Private Sector Operations Department.
"The project will also help to accelerate and expand private investment in clean energy infrastructure."
The 81-megawatt power plant in Chaiyaphum province, some 300 kilometres northeast of Bangkok, will be built and operated by Chaiyaphum Wind Farm, a special-purpose company 90% owned by Electricity Generating Co (Egco) and 10% by Pro Ventum, a German wind power developer.
Egco is Thailand's first independent power producer as well as the second-largest private power producer in the country.
The project is being developed as a public-private partnership under Thailand's small power producer programme, with Chaiyaphum Wind Farm entering into a power-purchase agreement with the state-owned Electricity Generating Authority of Thailand to provide clean electricity to the national grid.
The plant is scheduled to go into commercial operation in December 2016.
Thailand relies heavily on conventional fuels for electricity production, with almost 70% of its power generated from natural gas and 20% from coal and hydro, with the rest from renewables.
Fast-growing demand and dwindling natural gas reserves in the Gulf of Thailand mean the country needs alternate fuel sources to save on foreign exchange, protect the country from global price fluctuations and help to reduce greenhouse gas emissions. The government wants to develop wind power capacity of 1,800 MW by 2021 but needs significant private investment to achieve this goal since there is only 223 MW installed to date.