Early this month, Deputy Agriculture Minister Praphat Phothasuthon unveiled an energy-saving project with the fancy name "Solar Panels NFT for Thai Farmers".
Under the initiative, solar panels will be installed in one million farm households across the country to help reduce farmers' electricity bills by 30% in the coming years.
To fund the solar panels, the ministry plans to issue a non-fungible token (NFT) named "Solar Panels NFT for Thai Farmers" that can be legally traded with international investors in Singapore.
Mr Praphat said the energy generated by the panels will be used to power farm machinery such as electric tractors, milling machines, and crop-spraying drones.
Reportedly the ministry is in talks with financial adviser Capital Trust Group from New Zealand, which manages a Singaporean fund, to carry out a study of energy use in Thai agriculture.
It is praiseworthy for the Agriculture Ministry to get serious about helping farmers reduce energy costs -- but the project's details, especially the funding, induce doubts.
While the idea of issuing NFTs sounds innovative, the Agriculture Ministry needs to bear in mind that NFT fundraising contains uncertainty and risk. Pinning hopes on innovative financial innovation already makes the project sound like hot air, if not empty promises. The agricultural ministry does not have to take a chance with the NFTs. It can partner with the Energy Ministry and seek capital from the Energy Saving fund to launch solar projects.
In Thailand, finding a funding source for public solar projects is not a problem. The Thai government has already promoted renewable energy and over the past decade has spent billions of baht installing solar panels in local communities.
But these projects often run into problems.
Many solar projects built for local communities get left unused or broken as the state developers and companies do not provide adequate training to local users. For example, the Office of the National Anti-Corruption Commission (NACC) found five out of six solar-energy projects in a pilot project on a renewable energy promotion scheme in Mae Hong Son province were not functional and left unused.
Another problem is corruption. The NACC and the state auditor have investigated a number of solar energy projects and found many had been affected by corruption. As an example, the NACC is investigating the Racha Thewa tambon administration organisation (TAO) over Samut Prakan's notorious procurement of solar-powered street lamps topped with mythical kinnaree figures. The TAO overpaid on seven contracts for 6,773 poles at an average price of 94,884 baht each, for a total cost of about 642.65 million baht.
But bad experiences do not mean the government -- in this case, the Agriculture Ministry -- must stop providing people access to clean and affordable energy. It only means policymakers must think of transparency and sustainability first and foremost. Procurement is the easy part. The authorities need to prepare local people so they will have enough know-how to use the technology.
Moreover, to make these renewable projects impactful and sustainable, the government must increase quotas and rates and buy clean electricity produced by local people. Without good preparation and conducive energy policies, solar energy projects will become white elephants.