World Bank Group member International Finance Corporation (IFC) has approved a $67-million investment in Thailand-based solar power company Sermsang Palang Ngan Company Limited (SPN Ltd.) to boost the development of renewable energy projects in Thailand, Indonesia, and Vietnam.
The financing package includes an IFC loan of up to $32 million (1.2 billion baht) and a parallel loan from Siam Commercial Bank (SCB) of a similar amount, according to a company statement on Wednesday. The plan to invest in the company was first reported by DealStreetAsia in December.
The funding from IFC will support Sermsang Palang Ngan in financing the acquisition, development, and construction of renewable projects, with a focus on solar farms, solar rooftops, and biomass initiatives in Thailand and other ASEAN countries. IFC will also provide assistance to the company in establishing a green finance framework as it expands its presence in the East Asia and Pacific region.
Sermsang Palang Ngan, which is a subsidiary of Thailand-listed Sermsang Power Corporate, currently owns a 52-megawatt solar photovoltaic power plant located in Lopburi province, situated to the north of Bangkok. The plant sells electricity to the state-operated Electricity Generating Authority of Thailand (EGAT) through a non-firm power purchase agreement.
“Renewables offer a viable path forward in meeting growing energy demand, especially for emerging markets,” said Jane Yuan Xu, IFC Country Manager for Thailand and Myanmar. “We are proud to work with companies such as SPN and develop a long-term relationship with a growing renewable energy company and help expand its footprint in the region.”
The energy sector is the largest emitter in ASEAN countries, accounting for 55-70% of total greenhouse gas (GHG) emissions, according to the statement. Despite considerable potential for renewable energy, it currently constitutes less than 20% of the region’s energy supply in the region, putting ASEAN countries at the risk of a roughly 35 % reduction in its GDP by 2050 due to climate change and natural hazards.
Asia’s overall power capacity will experience a consistent rise in renewable energy capacity, reaching 63% by 2035, according to recent projections cited by the statement.
In Thailand, the government aims to ensure that renewables contribute 34% to its energy consumption by 2037. The country’s solar capacity target has also been revised from 6 GW to 15 GW by 2037, according to its latest Power Development Plan.
In the last decade, IFC has invested over $64 billion in emerging markets across infrastructure sectors. For FY23, IFC’s committed infrastructure portfolio reached $13.7 billion. In Thailand, IFC committed $613.4 million in FY23 with $29.2 million for infrastructure projects.
