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ADB-JICA joint fund makes first equity investment

LEAP, a vehicle backed by the Asian Development Bank and the Japan International Cooperation, has committed to Gulf Energy’s IPO as it seeks to build its portfolio in Thailand.

The Leading Asia’s Private Sector Infrastructure Fund (LEAP) has made its first equity investment in the initial public offering of Thailand’s Gulf Energy Development Public Company.

The vehicle is managed by the Asian Development Bank and is supported by a $1.5 billion equity commitment from the Japan International Cooperation Agency.

The LEAP investment in Gulf Energy is part of a bigger ADB commitment as the Manila-based multilateral subscribed to 64 million shares worth 2,880 million baht ($88 million; €75 million) of the Thai private power producer. The size of the LEAP investment was not disclosed and ADB had not responded to queries by the time of publication.

The Thai company began trading on the Stock Exchange of Thailand on Wednesday, raising 23,999 million baht through the IPO. It plans to use part of the proceeds to build more power generation capacity in Thailand, and will also seek opportunities to expand its renewable energy portfolio outside the country.

As the country’s third-largest power company, Gulf Energy currently has a total gross installed power capacity of 11.1GW under operation and development. Its portfolio comprises 17 projects in operation, which include gas-fired and rooftop solar facilities, as well as another 11 schemes under construction and development, which feature gas-fired and biomass plants.

ADB noted that Thailand is the second-largest energy consumer in Southeast Asia, with its power demand expected to grow 2.67 percent every year over the next two decades.

LEAP was established in August 2016 with a mandate to co-finance and invest in non-sovereign infrastructure projects across Asia-Pacific in various stages of development. During its first year, it approved more than $210 million in debt financing for two projects – India’s ReNew Clean Energy project and Indonesia’s Muara Laboh geothermal project. The ADB said in October this year that it was actively processing more than $500 million of debt and equity transactions for private infrastructure across South and Southeast Asia.