ADB's $85m backing for Thai wind farm

The Asian Development Bank has inked two loans totaling $85m to assist Thailand’s first independent power producer, Chaiyaphum Wind Farm Company.

Manila-based multilateral the Asian Development Bank (ADB) signed off two loans collectively worth $85 million yesterday to help Thailand’s Chaiyaphum Wind Farm Company (CWFC) to develop an 81-megawatt (MW) power plant in Northern province as a public-private partnership (PPP) under the country’s small power producer regulations.

The loans are respectively worth $30 million and $55 million, with former to be taken from the multi-donor Trust Fund known as the Climate Investment Funds (CIFs) which the ADB co-administers alongside other development banks, and the latter from its own funds.

The power plant, located in Chaiyaphum province, 300 kilometres (km) north-east of Bangkok, is being built and operated by Chaiyaphum Wind Farm Company, a special purpose firm 90 percent-owned by Electricity Generating Public Company (EGCO), Thailand’s sole independent power producer, and 10 percent by Pro Ventum, an international wind power developer based in Germany.

The project falls under Thailand’s small power producer programme and sees CWFC entering into a power purchase agreement with the state-owned operator Electricity Generating Authrority of Thailand (EGAT).

The plant is expected to start commercial operations in December next year.

Thailand relies heavily on conventional fuels for electricity production, with 65 percent of its power generated from natural gas and 20 percent from coal and lignite.

Fast-growing demand and dwindling natural gas reserves in the Gulf of Thailand mean the country needs alternate fuel sources to sustain cross-border commerce, protect the country from global price fluctuations, and help reduce greenhouse gas emissions, according to the multilateral.

The government is seeking to generate 1,800MW in wind power annually by 2021, yet is facing a significant financing gap with  223MW capacity installed to date.