Thailand will today receive $700m (£428m) in loan financing from the World Bank and its private investment arm International Finance Corp (IFC) to help fund renewable power and energy efficiency projects.
The IFC will contribute $400m, while the World Bank will commit $300m through its $5.2bn Clean Technology Fund, which provides financing for carbon reduction initiatives in developing nations.
An agreement is expected to be signed later today between the two institutions and Thailand's Energy Ministry.
The average interest rate for the loans will range from 0.25 to 1.75 per cent, with repayment periods of 20 to 30 years. Terms for the financing, which will be disbursed through Thai banks, will be released to loan applicants later this month.
The IFC and World Bank have estimated that it will cost $4.6bn to develop Thailand's renewable energy sector over the next two years, with private sector investments accounting for about 85 per cent of the total, or $3.9bn.
They predict that green power projects could reduce Thailand's annual oil imports by 3.2 million tonnes, while reducing carbon dioxide emissions by 10 million tonnes per year.
The World Bank has already identified several potential projects in the country that it is likely to back, including a plan to replace Bangkok public buses with hybrid or natural gas-fuelled vehicles and proposals for a fleet of waste-to-energy plants in Thai cities.
Thailand last year drafted a $440m renewable energy development plan that sets an alternative power target of 20 per cent of by 2022. The scheme calls for a drop in annual oil imports by $10.6bn and a reduction in greenhouse gas emissions by 29 million tonnes per year.
Officials are counting on the increased use of alternative energy, such as biomass, ethanol and biogas, as a means of achieving the targets. Fossil fuels currently account for 85 per cent of the country's energy needs.
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