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Thailand, Thai Biogas

Delivering clean fuel for local businesses

Thai biogas bar

Context

The Royal Thai Government is committed to pursuing policies which support sustainability. Thailand’s Renewable and Alternative Energy Development Plan aims to explore the country’s renewables potential with a view to cutting emissions and reducing dependence upon expensive energy imports. Management of waste water and air pollution have also been identified as key government priorities. Thailand’s industrial sector produces 6.8m cubic metres of waste water per day, much of which is linked to agricultural processing.

Project

TBEC won contracts to build and operate biogas plants at Phang Nga and Tha Chang in southern Thailand. TBEC’s plants generate power using biogas derived by cleaning waste water from agricultural processing factories. TBEC approached GuarantCo for support when local commercial finance was not available for an expansion of its business. The facility required was too small for local bank project finance teams and yet too complex for corporate finance teams. GuarantCo provided the project with a 100% guarantee of THB425m (US$13.5m), attracting a commercial lender, ICBC Thai, to provide finance.

Impact

‘We are excited to support TBEC in financing its highly developmental biogas plants, which have the added advantages of tackling local pollution and boosting rural incomes.’ Andrew Bainbridge, Chair of GuarantCo

The project has the capacity to deliver 7MW of clean biogas power for factories, homes and businesses. It is expected that 26,500 people will benefit from improved access to power and from substantial environmental benefits associated with cleaning waste water. TBEC’s clean biogas is 20 to 50% cheaper than power derived from fossil fuels. Reduced energy costs will stabilise employment within host factories and increase productivity. The project will enable the government to meet its targets to develop indigenous renewable energy and improve environmental safety in the agri-processing industry. GuarantCo’s guarantee strengthened local capital markets, encouraging ICBC Thai to support mid-sized renewable energy financing for the first time.