Thai Biogas Energy (TBEC) plans to invest about Bt700 million next year to build biogas power plants in Thailand and abroad, more than doubling its locations to nine from the current four domestic sites.
The expansion reflects foreigners’ interest in investing in renewable energy in Thailand, as the two major shareholders of TBEC are investment funds based in Finland and the United Arab Emirates.
Chief operating officer Pajon Sriboonruang said four of its five new projects were in Thailand, and one was in Laos.
The company has already secured contracts with customers of the |five plants. Construction of the |biogas plant in Laos will commence next quarter, and all projects will start operations by the end of next year.
TBEC develops biogas power plants under build-operate-transfer contracts.
It will sign a contract with a cassava-starch plant, for example, to generate power from the cassava plant’s waste. The contract term ranges from 10 to 20 years. After that it has to hand over the plants to its customers. Three of its existing power plants are fuelled by cassava waste, and the rest by palm oil.
TBEC was formed by the Private Energy Market Fund and Al Tayyar Energy (ATE) in 2003. The major investor in the PEMF is FinnFund, the investment arm of the Finnish government. The PEMF, which holds about 70 per cent of TBEC, has a policy of investing in renewable energy worldwide. It is in about 40 countries. TBEC is the largest biogas investment in its energy portfolio.
ATE is a clean-power development and investment company founded by Prince Moulay Hicham of Morocco. It is headquartered in the UAE.
The PEMF has given the green light to TBEC to invest in the Southeast Asia region without limit. The main focus remains on Thailand because of the strong support from the government.
TBEC is also in talks with agricultural enterprises in Vietnam and Indonesia to produce biogas from their agricultural raw materials such as cassava.
“We will expand our business in this region vertically and horizontally. In Thailand, we will go deep in advanced technology for biogas power plants and may diversify to other kinds of renewable energy such as solar. For neighbouring countries, we will expand our portfolio in biogas power plants,” Pajon said.
Since 2003, TBEC has been in a learning phase, running four biogas power plants.
And now it is confident in the way it is operating in this renewable energy field.
Therefore, it and the major shareholders decided to invest more in the Kingdom.
“I have decades of experience in the energy industry. I worked in many companies such as Star Petroleum Refining and Glow Energy, so I bring the good things from each company such as management and the benefits as well as the welfare system.
“Now it is proved that we have operated the right system, as the biogas business in Thailand is the largest investment of its kind among the renewable-energy businesses of PEMF.”
To invest nearly a billion baht next year, TBEC needs to inject more money in the company. A bank |overseas has already lent �10 |million (Bt416 billion) for the new projects.
Pajon asks the Energy Ministry not to reduce the incentives it gave to investors for renewable energy if it wants the development of this industry to be constant.
“The ministry should not reduce incentives just because it wants to limit the capacities submitted by investors. The offered capacities do not guarantee future installed capacities.
“If there is excess capacity in the future, there are many ways to solve this problem.
Many investors, particularly foreigners, are waiting for a clear policy from the state. If the Energy Ministry retains its policy on incentives, foreign direct investment will increase,” he said.