Thailand’s Experience with Its

Energy Conservation Fund and

EE Revolving Fund

Boonrod Sajjakulnukit Ph D
Department of Alternative Energy Development and Efficiency

Asia Clean Energy Forum boonrod_s@dede.go.th

June 3-5, 2008 Tel. 662 226 3998
ADB Manila, Phillippines Fax. 662 226 4172
 National Initiatives for Sustainable
Energy Development
• The ENCON Act
• The ENCON Fund
• The ENCON Program
• Privatisation of the Energy Sector
• Price Policy
• Tax Reduction
• Environmental Requirements
• Education and Public Campaign
 The ENCON Fund

Energy Conservation Programme

Compulsory Voluntary Complementary

• Existing designated
factories and buildings.
• Designated factories and
buildings under
designing or
construction.
• Government buildings.
• Human Resource
• Renewable Energy and Development
Rural Industries • Public Awareness
• Industrial Liaison Campaign
• Research & • Management and
Development Monitoring
• Existing non-designated
factories and buildings

Implementing agency: NEPO Implementing agency: NEPO

Implementing agency: DEDP
 EE Target and Conceptual Approach
ktoe Ratio of Energy to Economic Growth
2,000 mill USD/y
45,000
Energy Consumption Growth: GDP growth
40,000 800 mill USD/y
Originally (1995-2003) -- 1.2 : 1
35,000

30,000 Target – reduce to 0.85 to 1

EE
25,000
0.85 : 1 by 2011
20,000 EE
0.9 : 1 Accumulative Savings 2004–2008
15,000
2548 2549 2550 2551 2552 2553 2554 worth over 1.5 billion USD
Accumulative Savings 2004–2011
worth over 7 billion USD
Conceptual
Approach Demonstration
Demonstration&&Dissemination
Dissemination

High Tech.
Tax
TaxIncentive
Incentive

Process Improvement Revolving

RevolvingFund
Fund

Training Regulation
Regulation
Energy Management Training
Energy
EnergyManagement
ManagementPractice
Practice
Data/Information
Data/Information
Energy Efficiency Revolving Fund
Start in 2003

Partnership of Government and Banking Sector

For Energy Conservation
 Barriers / Concept
Barriers

• Limited access to funds

• Higher perceived risks
• High transaction costs
• Not a priority
• Banks were not interested
Concept and Approach

• Stimulate Investment and Stimulate Interest among

Banking Community
• Provide NO cost Capital to EE Market
• Commercial Lending
• Minimize Government Intervention
• Simplified Procedures
 Objectives

Stimulate and leverage commercial investment for

EE Improvement
Familiarize commercial banks with EE lending
market and opportunities

Bank Bank

Bank
Bank
RF
Work Process

DEDE allocate
budget for Banks lend
banks to Client
for EE Project

Banks
payback to
DEDE

EE Project
Implemented

Clients
Return Payment
Terms and Conditions

Size of Revolving Fund 125 Million USD

Loan Period 7 years maximum

Eligible Borrowers Facilities’ Owners, ESCOs and Project

Developers

Eligible Projects EE improvement or RE development and

Utilization

Loan Size from RF Up to 100% less than 1.25 million USD

Interests Not more than 4% (negotiable)

1 USD = 32 Bath
 Client Loan

EE Project Loan

Bank‘s Money Loan

RF Loan
i < = 4% ( Negotiation )
Size Loan : Up to 1.56 M.USD.
Loan Period <= 7 Yrs.
i = MLR +
( Approx. 5%, 6%, 7%, 8%, 9% )
Size Loan : Up to Bank Approve.
Loan Period 5-10 Yrs.
11 Participating Banks

Bangkok Bank (BBL)

Bank of Ayudhya (BAY)
Bank Thai (BT)
Thai Military Bank (TMB)
Siam City Bank (SCIB)
Siam Commercial Bank (SCB)
Thai Farmers Bank (TFB)
Exim Bank (Exim)
Krung Thai Bank (KTB)
SME Bank (SME)
UOB
 Eligible Investment Costs

ƒ Equipment and Installation costs

ƒ Consulting Costs – design, control, supervision,

guarantee fees

ƒ Civil works, piping, or necessary components

specifically and necessary for the project

ƒ Associated Costs necessary – removal of existing

equipment, transportation, taxes, VATs

Not Eligible: Land Costs, Land Improvement Costs, building construction,

Costs not specifically needed for the project – main transformers, substation
Number of Factories and Buildings received funding
(phase 1, 2, 3) 25 Apr.2008
207 projects
Food&Beverage 71
Chemical 27
Others 23
Textile 23
Non Metallic 20
Public Utilities 5
Metal Fabrication 4
Paper 2
Wood 1
Metal 1
0 20 40 60 80

Hospital
15
Hotel
14
Office
1
0 5 10 15 20 25 30
 Types of EE Measures Implemented (phase1,2&3)

Alternative Energy/Equiptment & replacement 99.0

Combine Cycle Power Plant 72.0
Million USD
High Eff. Machine Replacement 67.0
Boiler 27.0
Air Conditioning System 9.3
Industrial Process Improvement 8.7
Machine Improvement 3.3
Demand Management Controller 2.4
Furnace 1.5
Electrical System Improvement 1.5
Motor 1.0 Total investment of 293 million USD
25 Apr.2008
Insulation 0.3
Lighting 0.1
0 20 40 60 80 100 120
Samples of Projects
Nun-Yang Textile Factory

Change of High Efficient

Dyeing Machine

Investment 47 mill baht

Saving 11 mill baht/y
Payback 4.3 year

Bua-Sommai Rice Polishing

6 MW Biomass Power Plant

Investment 150 mill baht

Saving 37.5 mill baht/y
Payback 4 year
Samples of Projects

Future Tech Textile

High EE Dyeing Machine

Investment 9.2 mill baht

Saving 5.5 mill baht/y
Payback 1.7 year

Biomass-fired Hot Oil boiler

(originally fuel oil – burned)

Investment 10 mill baht

Saving 13 mill baht/y
Payback 9 months
Samples of Projects

Bangkok Cable

High EE Machinery

Investment 25 mill baht

Saving 10 mill baht/y
Payback 2.5 years
Samples of Projects

Viphavadee Hospital

Demand Control, Building

Automation System

Investment 18 mill baht

Saving 3 mill baht/y
Payback 6 years
Samples of Projects
Asian Chemical

High EE Boiler

Investment 2.2 mill baht

Saving 0.4 mill baht/y
Payback 6 years

Asian Supreme Food

gas turbine cogeneration

2.7 MW
Investment 200 mill baht
Saving 50 mill baht/y
Payback 4 years
Achievement in the 1st Phase ( 60 miiion USD. )

EE Stimulate Environmental Oil Imports

Investment Banks Benefits Reduction

Leverage EE investment TEXT

Reduce
more
Stimulate
than
oil
Reduce
imports
107
6 pollution
ofmillion
14
of over
commercial
USD
generation
82 (78
million
projects)
banks
liter/yr.
Savings
to be on
Reduce
Co2 Energy
interested
Reduction
Powermore
in than
Demand 44 opportunities
EEoflending million
40 million
over 34
tons
MW USD/yr.
Achievement in the 2nd Phase ( 60 miiion USD. )

EE Stimulate Environmental Oil Imports

Investment Banks Benefits Reduction

Leverage EE investment TEXT

Reduce
more
Stimulate
than
oil
Reduce
imports
113
11pollution
of
million
of
14over
commercial
USD
generation
93 (88
million
projects)
banks
liter/yr.
Savings
to be on
Reduce
Co2 Energy
interested
Reduction
Powermore
in than
Demand 46 opportunities
EEoflending million
18 million
over 32
tons
MW USD/yr.
 Achievement in the 3rd Phase
( 8 months of Operation approve 31 miiion USD. Of 124 miiion USD.)

EE Stimulate Environmental Oil Imports

Investment Banks Benefits Reduction

Leverage EE investment TEXT

Reduce
more
Stimulate
oil
Reduce
thanimports
71
11pollution
million
of of
14over
commercial
USD
generation
10(40
million
projects)
banks
liter/yr.
Savings
to be on
Reduce
Co2 Energy
interested
Reduction
Powermore
in than
Demand 20 opportunities
EEoflending million
21 million
over 31
tons
MWUSD/yr.
 The 3rd Phase of EE Revolving Fund

• More Financial Contribution from Banks (6 Banks ->11 Banks)

• More Technical Assistance from DEDE including project development
• Emphasize Renewable Energy Projects, SMEs

5.3 years of Operation

Leverage
Leverage 174
174 Factories
Factories
Investment
Investment 29 Buildings
29 Buildings
291
291 33 ESCOs
ESCOs
Mill
Mill USD
USD Total
Total of
of 206
206

Energy
Energy Savings
Savings
110
110
Mill
Mill USD/y
USD/y
 www.dede.go.th click Revolving Fund
Administrative Office (DEDE) 66 2 226 3850, 66 2 226 3851 (fax)

rf3.2551@gmail.com
 Holistic Approach

Mission Adjustment Organizational Restructure Value Creation

Paradigm Shift
Enforcer / Regulator Facilitator / Supporter
Boonrod Sajjakulnukit Ph D
boonrod_s@dede.go.th
Tel. 662 225 7324
Fax. 662 224 0914