The Asian Development Bank (ADB) and Gulf Chana Green Co Ltd yesterday agreed to provide a 1.11-billion-baht loan to help increase Thailand's share of renewable energy by developing a biomass power project in the South.
"Diversifying Thailand's energy mix will help the country meet increased demand for electricity and reduce its carbon footprint," said Michael Barrow, director-general of ADB's private-sector operations department. "ADB's 18-year loan shows the bank's long-term confidence in Chana Green and provides a positive signal to other banks and developers considering investing in infrastructure assets in the less-developed areas of southern Thailand."
Thailand's power consumption is expected to double from 2015 to 2036. To meet this need, the government has laid out plans to increase the share of renewable energy sources to 30%, with biomass becoming the second-largest renewable power source after solar.
Installed generating capacity of biomass is expected to almost double from 2,943 megawatts to 5,570MW by 2036.
ADB's financing will help Chana Green construct and operate a 25MW biomass power project in Chana, Songkhla province.
The project will convert waste from rubber trees into renewable electricity. The project will receive a tariff incentive of 0.3 baht per kilowatt-hour (kWh) for utilising biomass and one baht per kWh for investing in southern Thailand for a period of seven years after commercial operations begin.
ADB's assistance will help provide an environmentally sustainable solution for the country's abundant agricultural waste produced from the farming and wood industries by using it as a source of renewable electricity.
Chana Green is a project company that was set up to own, develop, build and run the project, which is wholly owned by Gulf Energy Development (GED), a private-sector power-generating company in Thailand.
GED has total gross installed power capacity of 11,125MW, both under development and operating in Thailand.
ADB, based in Manila, is dedicated to reducing poverty in Asia-Pacific through inclusive economic growth, environmentally sustainable development and regional integration.
Founded in 1966, ADB is owned by 67 members, 48 of which are from the region.