The Asian Development Bank (ADB) and Gulf Chana Green Company Ltd (Chana Green) has announced achieving financial close for a loan equivalent of up to THB 1.109 billion (≈ US$35 million) to help increase Thailand’s share of renewable energy by developing a 25 MWe biomass power plant project in the southern part of the country.
Thailand’s power consumption is expected to double from 2015 to 2036. To meet this need, the Government of Thailand has laid out plans to increase the share of renewable energy sources to the country’s final energy consumption to 30 percent, with biomass becoming the second largest renewable power source after solar with the installed generating capacity of biomass expected to almost double from the current 2.94 GW to 5.57 GW by 2036.
According to a statement March 16, ADB’s financing will help Chana Green construct and operate a 25 MW biomass power project located in Chana, Songkhla province in southern Thailand. The project will convert waste from rubber trees into renewable electricity. The primary source of feedstock will be rubberwood waste sourced from local farmers, sawmills, and intermediary suppliers located within the project area.
All electricity produced by the project will be purchased by Electricity Generating Authority of Thailand under the Small Power Producers programme. The project will receive a tariff incentive of THB 0.3 per kWh for utilizing biomass and THB 1.0 per kWh for investing in southern Thailand both for a period of seven years from commercial operations.
ADB’s assistance will help provide an environmentally sustainable solution to the abundant agricultural waste that is produced from farming and wood industries by converting biomass into a renewable source of electricity.
Chana Green is a project company set up to own, develop, construct, and operate the project, which is wholly owned by Gulf Energy Development (GED), a leading private sector power generation company in Thailand. GED currently has a total gross installed power capacity of 11.125 GW under development and operation in Thailand.
Diversifying Thailand’s energy mix will help the country meet increased demand for electricity and help reduce its carbon footprint. ADB’s 18-year loan shows the bank’s long-term confidence in Chana Green and provides a positive signal to other banks and developers considering investing in infrastructure assets in the less-developed areas of southern Thailand, said Michael Barrow, Director General of ADB’s Private Sector Operations Department.
