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Project Financing for Gulf PD Natural Gas-Fired Combined Cycle Power Plant Project in Thailand
Supporting Japanese Company's Participation in IPP Project in Thailand as part of Promoting Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth

  • Region: Asia
  • Infrastructures
  • Environment
  • Overseas Investment Loans
  • Project Finance
November 18, 2019
  1. The Japan Bank for International Cooperation (JBIC; Governor: Tadashi Maeda) signed today a loan agreement with Gulf PD Company Limited (GPD) of Thailand, in which Mitsui & Co., Ltd., holds an equity stake. JBIC will provide project financing*1 amounting up to USD208 million (JBIC portion) for a Gulf PD Natural Gas-Fired Combined Cycle Power Plant Project in Thailand, as part of JBIC's Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth (QI-ESG*2). The loan is co-financed with the Asian Development Bank (ADB), Export-Import Bank of Thailand (EXIM Thailand), Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, DZ Bank, Oversea-Chinese Banking Corporation Limited as well as regional banks in Thailand*3, with an overall co-financing amount of approximately USD1,366 million.
      
  2. In this project, GPD will construct, own and operate a 2,500MW Natural Gas-Fired Combined Cycle Power Plant (four generating units of 625MW each) located in Rojana Industrial Park, Rayong Province, in the east of Thailand. The electricity produced by these facilities will be sold to the Electricity Generating Authority of Thailand for a period of 25 years.
      
  3. In its Export Strategy for Infrastructure System revised in June 2019, the Japanese government expressed its intention to promote expanding orders for infrastructure systems, including the design, construction, operation and management of infrastructure, as well as increasing investments in local businesses. The government also announced its "overseas deployment strategy for the power sector" in October 2017, emphasizing overseas power generation business implemented by Japanese companies as a priority area in its policy. This overseas strategy states that the government will provide support for overseas power development projects through JBIC's financial instruments. This loan, therefore, is in line with these policies of the government as it will contribute to Japanese industry maintaining and enhancing its international competitiveness by financially supporting those Japanese companies that invest in overseas infrastructure projects as well as operate and manage these facilities on a long-term basis.
      
  4. According to the power development plan of the Thai government, the country's demand for electricity is projected to grow by an annual average of approximately 3.1% until 2037, and this project is considered to be a part of the major base load. It will supply the energy necessary for the Thailand 4.0 initiative and the Eastern Economic Corridor Plan, which are key parts of the government's economic policy. The project is also significant for Japanese firms operating in Thailand, from the point of view of ensuring a stable supply of electricity. As such, the project will not only contribute to infrastructure development in Thailand, but it will also contribute to overseas economic activities of Japanese firms.

  5. As Japan's policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in expanding overseas infrastructure businesses by drawing on its various financial instruments for structuring projects, and by performing its risk-assuming function.
      
Note
  1. *1 
    Project finance is a financing scheme in which repayments for a loan are made solely from the cash flows generated by the project.
  2. *2 
  3. *3 
    These banks include the following, all in Thailand: Bank of Ayudhya Public Company Limited (Bank of Ayudhya affiliated with the Mitsubishi UFJ Financial Group), Bangkok Bank Public Company Limited, The Siam Commercial Bank Public Company Limited, CIMB Thai Bank Public Company Limited, Land and Houses Bank Public Company Limited, Krung Thai Bank Public Company Limited, Government Saving Bank, and Kasikornbank Public Company limited.

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