Cumulative Lending and Non-lending Operations to Thailand
As of 31 December 2008, 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 $60.29 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, 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.
The country operations business plan (2008-2010), completed in 2008, reaffirmed that the core strategic areas of partnership in the country partnership strategy (2007-2011) remain relevant and closely aligned with the Government’s policies and action plans to promote long-term, sustainable economic growth, and social development.
Technical assistance approvals have been : 4 projects for $1.53 mil in 2006, 2 projects for $1 mil in 2007, and 4 projects for $2.77 mil in 2008.
Expansion of the partnership between Thailand and ADB builds upon the successful completion of three major technical assistance projects in 2008. First, ADB supported the Government’s efforts to prepare a strategic development plan for Southern Thailand. Second, ADB provided advisory assistance for implementing the Capital Market Development Master Plan that has directly contributed to new legislation and regulations. Third, ADB provided technical assistance to strengthen Thailand’s role, capacity, and effectiveness as a regional development partner. Broad-based assessments of Thailand’s railway and water sectors were undertaken to increase ADB’s understanding of key issues, constraints, and opportunities in each sector.
Four technical assistance projects have been approved in 2008, in the amount of US2.77 million. These included the preparation of the GMS Highway Expansion Project in which ADB financing will be used to widen key sections of the East-West and North-South Economic Corridors in Thailand; the advisory and capacity building support to mainstream energy efficiency measures in Thai municipalities; the capacity building to introduce e-learning networks among Thai primary schools in rural areas; and further development of the Thai capital market.
In 2009, ADB's operations in Thailand will continue to focus on the core strategic areas of partnership under the CPS, such as structuring public–private partnerships for complex, large-scale infrastructure projects; addressing key structural and regulatory reforms to further develop the domestic capital market; and introducing innovative approaches and technologies for improving environmental management and promoting energy efficiency initiatives.
In an effort to respond to the impacts of the global financial crisis on Thailand's export -driven economy and to restore investor and consumer confidence in the wake of a prolonged period of political instability, the Government of Thailand has requested financial assistance from ADB in the form of a $500 million Program Loan in 2009. Moreover, discussions are underway regarding potential financial support from ADB's public and private sector windows to finance complex, large-scale infrastructure projects under this program.
For private sector operation, ADB, in January 2009, approved a $5 million loan and a $72.9 million partial credit guarantee to construct and operate a 125 megawatt(MW) biomass power plant using wood waste products as fuel. The project aims to sustainable economic development in Thailand through contribution towards achieving minimum-share targets for renewable energy in the generation mix.
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