ADB lends $140M for Thai solar projects

ADB is lending Bangchak Petroleum Company up to US$140 million to build two solar power plants in central Thailand.

The 8-megawatt and 30-megawatt plants are due to be completed in Ayutthaya next year. It is intended to help the Thai government achieve its target of getting 20.4 percent of its primary commercial energy—or 5,608 megawatts of installed power—from renewable sources by 2022. Currently, renewable sources, including biomass, solar, and hydropower, only contribute 1,754 megawatts of energy.

"This marks one of Thailand’s biggest solar power plant projects and clearly shows the viability of large-scale solar power generation in the country and, indeed, elsewhere," said Joe Yamagata, Deputy Director General in Asian Development Bank’s Private Sector Operations Department. "If Thailand can meet some of its growing demand for power from renewables like solar energy, the country will generate less greenhouse gas than it would have otherwise."
BCP has kicked off a zero-carbon strategy under which it will neutralize its carbon footprint by developing large-scale solar power projects and reduce carbon emissions across its operation.

Under the 15-year loan agreement, Japan’s Mizuho Corporate Bank Ltd. will assume a large portion of the medium-term risk. In addition to the loan, ADB is also providing $400,000 in technical assistance to help BCP develop, implement, and monitor its carbon neutral goals and provide training to other energy companies in zero-carbon emission strategies.

The Electricity Generating Authority of Thailand and the Provincial Electricity Authority have agreed to buy the power generated by the two plants. The plants will use multicrystalline technology produced by Suntech Power, a solar panel manufacturer listed on the New York Stock Exchange.

The Bangchak plants are part of ADB’s Asia Solar Energy Initiative, which seeks to support projects that will help Asia make the most of its potential to generate solar power. The initiative aims to provide $2.25 billion in financial support to realize 3,000 megawatts of solar power in ADB’s developing member countries by mid 2013. The loan to Bangchak is part of ADB's growing private sector activities, which are expected to account for half of ADB operations by 2020.