IFC launches energy financing project in Thailand
IFC, a member of the World Bank Group, is scaling up energy efficiency and renewable-energy financing in Thailand by partnering with Bangkok Mitsubishi UFJ Lease Ltd to help companies find funding for projects that reduce greenhouse-gas emission and use s
IFC’s risk-sharing facility agreement with Bangkok Mitsubishi UFJ Lease signed today is expected to support up to US$70 million in new leases to enable companies to acquire equipment that reduces energy consumption and pollution, leading to more efficient production, lower costs, and higher productivity.
According to a statement, by sharing the credit risk on these leases, IFC is helping Bangkok Mitsubishi UFJ Lease expand its renewable energy and energy-efficiency financing portfolio. As IFC’s first risk-sharing facility on energy efficiency in Thailand, the partnership is also aimed at deepening the market for these products in the country.
“We are taking full advantage of IFC’s support and global experience to help develop our portfolio of sustainable-energy leases in Thailand and combining that with our knowledge and experience from Japan,” said Hideki Kobayakawa, president of Bangkok Mitsubishi UFJ Lease.
In 2009, IFC entered into a memorandum of understanding with Mitsubishi UFJ Lease and Finance, BMUL’s parent company, to cooperate in developing lease-financing opportunities in sustainable-energy. The agreement with Bangkok Mitsubishi UFJ Lease is the first transaction under the MOU.
“The partnership between IFC and Bangkok Mitsubishi UFJ Lease is part of our strategy to scale up financing to projects in energy efficiency and renewable energy,” said Serge Devieux, IFC Director for Financial Markets in Asia. “Private sector financing is essential in helping developing countries address climate change.”
The facility also receives support from the World Bank’s Clean Technology Fund.
Thailand relies heavily on expensive oil imports for its energy supply. The industrial sector is the biggest power consumer in the country. The Thai government aims to reduce energy intensity in the industrial sector by 20 per cent by 2020 from its level in 2006.