(EnergyAsia, November 10 2011, Thursday) — The Asian Development Bank (ADB) said it is lending US$170 million for Thailand to build a new 1,600MW power plant to help meet its demand for clean, affordable electricity.
Due to start up in 2014, the natural gas-fired plant will be built in Nong Saeng district north of Bangkok under a public private partnership arrangement.
By using clean burning combined cycle technology, the plant will prevent the annual emission of an estimated five million tons of carbon dioxide that would otherwise be produced by coal-fired generators.
The ADB said a subsidiary of J-Power, Japan’s largest wholesale power supplier, will develop and operate the plant, and sell the electricity to the state-owned Electricity Generating Authority of Thailand under a 25-year power purchase agreement. Thai energy firm PTT Public Company will supply the gas, and a group of companies led by Japan’s Mitsubishi Heavy Industries will build the facilities.
Daniel Wiedmer, an investment specialist in the bank’s Private Sector Operations Department, said:
“This is the first large independent power producer (IPP) project to reach financial close in Thailand since the 2008 global economic crisis. It incorporates state-of-the-art technology to generate electricity far more efficiently than coal fired systems, which are the only domestic alternative for IPPs.”
ADB said its participation and willingness to provide a long-term loan has encouraged co-lending support from commercial banks. The availability of long dated finance has enabled J-Power to pay down the plant’s high upfront costs over a longer term, allowing it to provide low-cost energy to consumers in Thailand.
ADB is heavily involved in clean energy development in Thailand where it is helping to finance two private sector solar power projects, including one of the world’s largest solar photovoltaic plants in Lopburi.
Alongside the investment by J-Power and ADB’s 23-year loan, the Japan Bank for International Cooperation and three commercial banks, Mizuho Corporate Bank Ltd, KASIKORNBANK PCL, and Siam Commercial Bank PCL, are providing combined debt of over US$1 billion.