A new injection of capital through a green loan facility is set to bolster the development of renewable energy projects in Thailand, Indonesia, and Vietnam, with the International Finance Corporation (IFC) committing $64 million to Sermsang Palang Ngan Company Limited (SPN) to meet the region’s surging energy demands.
The financing package includes a $32 million loan from IFC and a parallel loan of a similar amount from Siam Commercial Bank (SCB). This funding will enable SPN to finance the acquisition, development, and construction of renewable projects, particularly focusing on solar farms, solar rooftops, and biomass installations in Thailand and other ASEAN countries. Additionally, IFC will support SPN with a green finance framework as it expands its presence in the East Asia and Pacific region.
SPN presently operates a 52-megawatt solar photovoltaic power plant in Lopburi province, supplying electricity to the Electricity Generating Authority of Thailand (EGAT) under a non-firm power purchase agreement.
Mr. Varut Tummavaranukub, CEO of Sermsang Power Corporation Public Company Limited (SSP) group, the parent company of SPN, expressed gratitude for IFC’s support in developing projects aligned with their commitment to secure a sustainable energy future for all in Asia.
The energy sector is a major contributor to greenhouse gas emissions in ASEAN countries, accounting for 55 to 70 percent of total emissions. Despite significant potential for renewable energy, it currently represents less than 20 percent of the region’s energy supply. This imbalance poses a risk of a 35 percent reduction in GDP by 2050 due to climate change and related hazards.
Recognizing the urgency, a shift to renewable energy is imperative. Asia’s overall power capacity is projected to witness a substantial increase in renewables, reaching 63% by 2035. In Thailand, the government targets renewables to supply 34% of energy consumption by 2037, with solar capacity set to increase from 6 GW to 15 GW by 2037.
Jane Yuan Xu, IFC Country Manager for Thailand and Myanmar, emphasized the importance of renewables in meeting escalating energy demands, particularly in emerging markets. She underscored IFC’s commitment to supporting companies like SPN in expanding their renewable energy portfolios and advancing regional sustainability efforts.
IFC boasts extensive experience in financing and structuring energy transactions in emerging markets, with over 50 gigawatts of energy generation financed to date. As of the end of FY22, IFC’s committed energy portfolio totaled $6.1 billion, with half dedicated to renewable energy projects. Each year, IFC’s portfolio clients provide electricity to approximately 100 million people worldwide.
