Financing of cogeneration plants in Thailand during the economic crisis | |
| Author | Naravane, Chaitanya Madhav |
| Call Number | AIT RSPR no. SM-98-41 |
| Subject(s) | Electric power-plants--Design and construction--Finance Financial crises--Thailand Biomass energy--Thailand |
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration, School of Management |
| Publisher | Asian Institute of Technology |
| Abstract | Financing of cogeneration plants with biomass as fuel with unheged foreign currency loan upto 70 % of the project cost was well established practice in Thailand. This had yielded desired profitability till Thailand's currency, Baht (THB) was pegged to US$ and was maintained by Thailand's central bank, Bank of Thailand. In July, 1997, Baht's peg to US $ was removed which underwent massive devaluation with difficulty to obtain loan even at high interest rates. This was mainly because bankers themselves were exposed to exchange rate losses and non working loans. At the same time, though EGAT, Electricity Generating Authority of Thailand has stopped giving guarantees as a step towards privatization. Profitability of the project has reduced substantially even amended power purchase agreement (PP A). This study is an attempt to study extent of privatization of EGAT, its role after privatization, extent of profitability improvement in the cogeneration power projects due to amendment in the PPA. Also source of funds to finance the project. It could be inferred that profitability of the project have improved but not to the pre devaluation level with amended PP A. There is a need to amend it further to attract further investment in the sector. Also, multilateral funding agencies like the European Investment Bank (EIB) and International Finance Corporation (IFC) are viable source of finance. Study indicates that IFC could offer comparative advantage than EIB. |
| Year | 1998 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Gupta, Jyoti P.; |
| Examination Committee(s) | Johri, Lalit M. ;Gonzales, Alan Dale |
| Scholarship Donor(s) | Self Support; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1998 |