International Finance Corporation, the investment arm of World Bank, is investing US$1.7 million for a 20 percent stake in Solar Power (Korat 1) Co Ltd, the largest solar power plant in Southeast Asia, to expand private power generation while helping develop rural Thailand.
Solar Power (Korat 1) owns and operates a 6-megawatt grid-tied solar power plant in the Nakhonratchasima Province, an area with one of the best solar resources in Thailand. The project supports the government's goal of generating at least 20 percent of energy from renewable sources by 2022, which will improve the supply of clean energy, help move Thailand toward low-carbon growth, and reduce the country's reliance on imported energy. The solar farm will displace an estimated 4,785 tons of carbon dioxide equivalent annually, boosting global climate change mitigation efforts.
SPC Korat 1 is majority owned by Solar Power Co Ltd or SPC, a Thai developer of large, grid-connected, solar photo-voltaic projects. The developer has secured 34 licenses to build and operate grid-connected solar farms across Thailand. SPC Korat 1 was created to develop the first of these licenses and its 6-megawatt solar power plant went into operation in April 2010.
"We are very happy to have IFC as a partner in this first project to provide a cleaner and more sustainable energy source for our country," Wandee Khunchornyakong, managing director of SPC, said in a statement. "We are considering other renewable energy investments and we look forward to working with IFC on these projects in the future."
IFC's investment in this first project represents the start of a partnership with SPC with plans to co-invest in some of the future solar projects as well as in SPC itself. If fully exercised, IFC's investment rights in SPC and its related companies could amount to as much as US$20 million. SPC Korat 1 also has received a minority equity investment from the Energy for Environment Foundation and debt financing from Kasikorn Bank.
Anita George, IFC Director for Infrastructure, said "IFC's support to renewable energy generation in Thailand, specifically solar, will encourage similar investments in the region. And also we look forward to working with SPC, a Thai sponsor whose management has decades of experience in the solar industry, to help them replicate their success with this project on future sites."
Since 2005, IFC has invested more than $1 billion in renewable energy projects. IFC's strategy in Thailand focuses on enhancing the competitiveness of the private sector; providing opportunities for populations outside the main urban economies, particularly in the northeast and southern provinces; and supporting environmentally and socially sustainable growth.