Cumulative Lending and Non-lending Operations to Thailand
As of 31 December 2007, the cumulative amount of ADB's lending operations for Thailand (both public and private sector loans) stood at approximately $5.4 billion for 84 projects. Lending to Thailand accounts for 4.8% of ADB's total lending to its DMCs. For Technical Assistances (TAs), approximately $57.5 million has been provided for more than 150 projects covering a wide range of sectors and activities.
The Sectoral distribution of loans is as follows: energy accounts for 31.0%; transport and communications 22.5%; finance 12.0%; water supply, sanitation and waste management 10.0%; health, nutrition, and social protection 9.3%; agriculture and natural resources 9.2%; education 3.0%; industry and trade 2.4%; and multisector 0.7%.
Operations Prior to the Establishment of Thailand Resident Mission
During the Asian Financial Crisis (1997-1999)
In the mid 1990's, ADB provided two to four loan projects a year, and total loan disbursements to Thailand were $286 million during 1995-1996. When the 1997 Asian financial crisis broke out, ADB immediately pledged $1.2 billion to Thailand with a crisis assistance package consisting of fast disbursing ‘line of credit' and program loans. The package included the Rural Enterprise Credit Project ($200 mil), the Financial Markets Reform Program ($300 mil), the Social Sector Program ($500 mil), and the Export Financing Facility (ADB's loan of $50 mil and a partial credit guarantee for the syndicated loan of $950 mil). In 1997, loan approvals rose to $550 million as compared to the pre-1997 IPF of $275 million, and to over $600 million in 1998.
In 1999, ADB provided three loans to Thailand including the Agriculture Sector Program ($300 mil), the Higher Education Development Project ($59.3 mil), and the Restructuring of Specialized Financial Institutions (TA loan of $4.5 mil). The last country strategy (Interim Country Operational Strategy Study) for Thailand was prepared in May 1999.
Pre-TRM Period (2000-2005)
In June 2000, Thailand successfully completed its 34-month Stand-by Arrangement with the IMF, indicating that it had emerged from the economic crisis. The graduation from the IMF program signaled the country's desire for a greater independence in its economic management, and the Government has since limited its foreign borrowing.
ADB's Country Strategy and Program Update (CSPU) for Thailand was last prepared in July 2001. There has been no public sector loan to Thailand since 1999. Currently, the last active loan is closed in 2006. TA approvals (including co-financing) have been: 6 projects for $2.4 mil in 2000, 7 projects for $1.7 mil in 2001, 3 projects for $900,000 in 2002, 2 projects for $210,000 in 2003, and 5 projects (including tsunami assistance) for $3.0 mil in 2005.
In November 2003, ADB provided a $40 million private sector loan (OCR), a $70 million political risk guarantee, and the complimentary financing scheme for cofinanciers' loans up to $100 million to construct and operate a coal-fired power plant (BLCP Power Project) on a build-own-operate basis.
The opening of the Thailand Resident Mission (TRM)
The opening of the Thailand Resident Mission in 2005 marked a new chapter in the country’s long-standing Relationship with ADB. Recognizing Thailand's emergence as a middle-income country, a Country Partnership Strategy (CPS) 2007-2011, [ PDF ] a five-year partnership framework between the Government and ADB, was endorsed by ADB’s Board of Directors in May 2007. The CPS at the national level supports Thailand’s efforts to enhance its competitiveness in the global economy and to promote higher levels of private investment. Core areas of partnership include development of infrastructure, capital markets, and environmental sustainability. At the regional level, the partnership focuses on increasing Thailand’s role, capacity, and effectiveness as a development partner through cofinancing projects in neighboring countries, promoting subregional trade and investment, and further developing Asian bond markets.
Expansion of the partnership between Thailand and ADB builds upon the successful completion of several major TA projects in 2007. These include support for implementation of the capital market master plan, capacity building for commercial borrowings of local government units, analysis of options for integrating Bangkok’s urban mass transit system, and maximizing private sector participation in the financing and operation of an expanded network. For 2008, ADB will continue to support the development of Thailand's capital market. ADB will also provide a TA for implementing an integrated ticketing system on the new mass rapid transit lines planned for Bangkok. Additionally, advisory TA will be provided to support the preparation of a sustainable development plan for Southern Thailand. No loans were provided in 2007, but discussions to develop a business pipeline for both private and public sector lending progressed well during the year.
In 2005, ADB approved 7 TAs to Thailand in the amount of US$3 .35 million while in 2006, it approved 4 TAs to Thailand, amounting to US$1 ,531 million. And, in 2007, 2 TAs has been approved in the amount of US$1 million.
Additionally, consistent with Thai government’ effort to develop the domestic capital market, ADB issued a debut local currency bond of 4 billion baht (US$ 102.5 million) in May 2005 and another issuance of 6.5 billion baht (US$ 180 million) in September 2006.
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