ADB's Work in Thailand
Catalyzing One of Southeast Asia's Most Dynamic Economies
ADB has been present since the start of Thailand’s impressive journey to middle-income status.
Sprawling across more than 176 hectares in central Thailand, more than half a million gleaming panels soak up the energy provided by the sun. The solar panels provide power to the national grid, and they are also a symbol of the country’s leadership role in Southeast Asia.
The Natural Energy Development solar plant in Lopburi province, supported by financing from ADB, produces 84 megawatts of electricity, which is enough to supply electricity to 70,000 households, all using the power of the sun.
The Lopburi solar plant helped transform commercial sentiment toward solar energy projects. It proved that renewable energy projects can be reliable, sound, and relatively low-risk ventures.
“Thailand is the leader in Southeast Asia in solar energy, and many countries in the region would like to copy its success,” says Daniel Wiedmer, principal investment specialist in ADB’s Private Sector Operations Department.
The Government of Thailand is seeking to have 30% of power generation coming from renewable sources by 2036. Due in part to the success of the Lopburi plant and its catalytic effect on private investment, officials say that target might actually be exceeded.
"We appreciate our close partnership with ADB in addressing Thailand’s development challenges including competitiveness, economic reform, inclusive growth, and regional cooperation and integration, as well as support at the subregional level to enhance inclusive growth and sustainable development."
Fueling an export boom
The energy renaissance that ADB has helped foster in Thailand is just one aspect of a relationship that dates back to the establishment of ADB in 1966. Since then, Thailand has evolved from a low-income, agriculturally based country into the second-largest economy in Southeast Asia. It reached upper-middle-income status in 2011 and now has its sights set on becoming a high-income country.
Thailand was the recipient of the first loan ever extended by ADB. The $5 million loan to the Industrial Finance Corporation of Thailand in January 1968 contributed to the country’s industrial development, boosting export earnings and helping to lay the foundations for Thailand’s subsequent economic boom. The loan was the only source of foreign exchange for re-lending by the corporation at the time, and therefore played a vital role.
Later, Thailand integrated its manufacturing production, particularly of automobiles and electronics, into regional and global value chains, making it a global presence today in these industries.
Financing key sectors
As Thailand’s economy took off in the 1970s, the country was looking to upgrade its road system. ADB’s 1980 Highway Sector Project took what was at the time a novel approach to the challenge of upgrading roads. The sector loan helped upgrade and strengthen more than 1,200 kilometers of roads and also improved road safety, maintenance, and other policies needed to maintain a modern national road system. Today, Thailand has some of the most modern, efficient roads and highways in Southeast Asia.
Since 1966, ADB has invested more than $6.7 billion in 275 loans, grants, and technical assistance projects focused primarily on energy, and transport and communication. ADB has provided no new public sector loans to Thailand since 2010. Instead, responding to Thailand’s needs as an upper-middle-income country, ADB has provided policy advice, capacity building, and knowledge support for infrastructure development, social sector reform, financial sector improvement, and regional cooperation.
“We appreciate our close partnership with ADB in addressing Thailand’s development challenges including competitiveness, economic reform, inclusive growth, and regional cooperation and integration, as well as support at the subregional level to enhance inclusive growth and sustainable development,” says Apisak Tantivorawong, Thailand’s Minister of Finance.
This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.