The Asian Development Bank (ADB) has invested 1.97 billion baht (US$57.7 million) in B. Grimm Power Public Company to develop renewable energy projects in Southeast Asia by subscribing to the initial public offering (IPO) of the Thai independent power producer.

B. Grimm raised over 10.4 billion baht after selling 651.8 million ordinary shares at 16 baht each, or near the top of the marketing range of between 15 baht and 16.50 baht. The ADB subscribed to 123 million shares in the IPO valued at 1.97 billion baht. In addition, the bank will also administer a loan of up to US$20 million from the Canadian Climate Fund under the clean energy financing partnership facility of the ADB.

Established in 1993, B. Grimm is one of the largest private power producers in Thailand with a total capacity of 1,626 MW, operating 12 gas-fired plants, with five more under development or construction.

In recent years, B. Grimm has diversified into renewable energy and is operating 15 solar power plants. Based on the success of these and the strong potential for expansion within the Asean region, B. Grimm is planning to increase the shares of renewable energy generation in its portfolio from 10% to 30%.

Lopburi Solar Farm, Thailand. Photo: Asian Development Bank Flickr.

ADB’s equity investment will be earmarked toward B. Grimm’s 114 MW solar projects and 16 MW wind power projects in Thailand as well as solar, wind and other renewable energy projects in Cambodia, Indonesia, the Lao People’s Democratic Republic, Myanmar, the Philippines, Thailand and Vietnam.

“The project will help support B. Grimm in diversifying its energy production and expand to other less-developed countries,” says Jackie Surtani, a director of ADB’s private sector operations department. “In doing so, the project will help the Asean region in its transition to a low-carbon economy through the development of renewable energy.”

The Asean countries face a rapid rise in energy demand, fuelled by factors such as high population growth, sustained economic growth, urbanization and an expanding middle class. According to the Organization for Economic Cooperation and Development, electricity consumption in Asean countries will grow more than 8% a year between 2009 and 2030.

The administered loan from Canada will contribute to the diversification of Asean’s energy mix by adding renewable energy capacity, in particular, solar power. Under this, the power generated from individual solar modules will be collected using battery storage and software, to be dispatched to thousands of homes and commercial buildings during peak demand hours. It will also help the company address various legal, technical and regulatory challenges in some of the Asean countries.

The ADB is likewise planning to provide a corporate loan facility to B. Grimm to support its future expansion and development of gas-fired and renewable power projects in the Asean region.