Thailand eyes Future Fund revival to finance infrastructure as debt room tightens

Thailand is preparing to revive the Thailand Future Fund as an off-budget financing tool, using revenue-generating roads and expressways to raise money for new infrastructure projects as the government tries to keep investment moving without adding pressure to the public debt ceiling.

The move comes as public investment faces tighter budget constraints and Thailand’s debt room narrows. Public Debt Management Office data showed public debt at 66.82% of GDP as of May 2026, while the country’s internal public debt ceiling is currently set at 70% of GDP.

The government’s medium-term fiscal plan also points to rising pressure, with public debt forecast to reach 69.36% of GDP by the end of fiscal 2027, close to the legal ceiling. The 2027 fiscal budget is projected at 3.788 trillion baht, with a deficit of 788 billion baht.

State looks to recycle existing assets

Jindarat Viriyataveekul, director-general of the Public Debt Management Office, said the PDMO is working with the State Enterprise Policy Office to screen government projects with potential to raise funds through an infrastructure fund.

The plan is being studied by a subcommittee on fundraising to reduce reliance on public debt. A meeting on the proposal is scheduled for this month.

Under the proposed model, the state would use brownfield projects — completed assets that already generate steady revenue — as reference assets for fundraising. These could include road networks and expressways under the Department of Highways.

The proceeds would then be channelled into greenfield projects, or new infrastructure projects that are still in the early stages of development.

Roads and expressways likely first in line

The early focus is expected to be on road and expressway networks, which are seen as the most suitable pilot assets because they already have clear revenue streams.

The approach is similar to the asset-recycling model behind the Thailand Future Fund, which was designed to securitise future cash flows from public infrastructure assets and reduce dependence on annual budget allocations. The World Bank describes the fund as an alternative infrastructure-financing mechanism beyond direct government borrowing and public-private partnerships.

Officials believe the model could help the government unlock money from existing infrastructure and use it to fund new projects without immediately increasing direct public debt.

PPPs remain main route for mega-projects

For large-scale mega-projects with strong commercial potential, the government will continue to rely mainly on public-private partnerships, or PPPs.

Thailand already uses PPP mechanisms to support infrastructure and public-service projects by state agencies facing budget limitations, according to the State Enterprise Policy Office.

The Future Fund approach is therefore expected to complement, rather than replace, PPPs. Infrastructure funds would be used for projects suitable for asset recycling, while PPPs would remain the preferred option for commercially viable projects that can attract private investors.

Short-term loans may bridge transition

Jindarat said the shift towards infrastructure-fund financing cannot take place immediately. A transition period will be needed to prevent disruption to ongoing projects and to keep financing costs under control.

During this period, the PDMO may still rely on short-term loans or phased borrowing to support projects until the fund structure is ready.

Officials are also studying whether to use an existing infrastructure fund or establish a new one. Using an existing fund could involve more complicated management, while creating a separate fund may allow more flexible oversight of large projects.

Clarity on the fund structure is expected in fiscal 2027.

No electric train concession buyback plan yet

Jindarat said the current plan is aimed at raising capital for new infrastructure construction and does not yet include a proposal to establish a fund to buy back electric train concessions.

She said any fundraising approach must be based on suitability and should not increase the government’s long-term financing burden.

The proposal reflects a broader shift in Thailand’s infrastructure strategy, as the government looks for ways to sustain public investment while preserving fiscal discipline and keeping debt close to its legal limit.

Source: Krungthep Turakij