BANGKOK, THAILAND - The Asian Development Bank (ADB) is lending up to B4.2 billion to The Bangchak Petroleum Company Public Company Limited (BCP) to build two solar power plants in central Thailand. The loan agreement was signed today in the Thai capital, Bangkok.
The 8-megawatt and 30-megawatt plants - due to be completed in Ayutthaya next year - will help the Thai government achieve its target of getting 20.4% 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 ADB'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 - listed on the Thai stock exchange - is a prominent integrated oil refining and marketing company in Thailand. Its largest shareholder is national oil company PTT PCL. 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 on the Baht-denominated loan. 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.
Thailand is one of the largest energy consumers in Southeast Asia and the Electricity Generating Authority of Thailand (EGAT) projects demand to grow an average of 4.22% per year between 2008 and 2020. Currently, around 70% of Thailand's installed power generation is sourced from imported natural gas, which leaves the country at the risk of volatile prices and uncertain supply. However, the tropical nation has a very high potential to generate solar energy.
EGAT 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.