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Islamic Bank backs Songkhla

Songkhla Biomass Co has secured a Bt620-million project loan from the Islamic Bank of Thailand for its 9.9-megawatt power-plant project in Songkhla.

Songkhla Biomass is a joint venture of Ratchaburi Electricity Generating Holding (Ratch), Precise Power Producers Co and Assiddeek Savings Cooperative.

Noppol Milinthanggoon, chief executive officer of Ratch, said yesterday that the JV was the first-ever model of community involvement in such a project, which was a key success during its development.

The cooperative will allocate shares in Songkhla Biomass to residents living around the power-plant site.

"Community involvement in the project will lead to their understanding about the power plant. They will closely investigate and monitor the plant, ensuring its efficient operation. That will help create a sense of ownership among them," he said.

Ratch has supported the project with capital and experienced manpower specialised in engineering and finance. The project responds not only to Ratch's renewable-energy strategy, but also to the government's policy of promoting renewable and alternative energy with an aim to

increase biomass-energy capacity to 3.63 gigawatts by 2021.

Narongsak Wichetphan, managing director of Songkhla Biomass, said the project would distribute 9.1MW to the Provincial Electricity Authority under a 25-year, non-firm power purchase agreement for a VSPP (very small power producer) entered in July.

It has been granted an adder of Bt1.30 per unit from the Energy Regulation Commission for seven years and promotion privileges from the Board of Investment for eight years.

With financing in place, the company will now work on the power plant's design, machine and equipment procurement and the plant's construction.

"Commercial operation is expected in July 2014," Narongsak said.


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