5 November 2020

Korat 18MW Solar Farm


  • Thailand’s greenhouse gas emissions grew by c. 70 percent between 2000 and 2010, leading to environmental concerns
  • The Solar Power Company Group (SPCG) intended to construct 34 solar farms to provide 204 MW to the national grid and reduce the country's reliance on fossil fuels, which accounted for 90% of Thailand’s energy mix in 2008


  • Local private sector investors (e.g., commercial banks), viewed solar power as an unproven, high-risk investment with only 2MW of installed capacity attributed to solar energy in 2008
  • Large-scale solar energy projects therefore lacked private financing


  • In 2010, the International Finance Corporation (IFC) and Clean Technology Fund (CTF) provided USD 12M of “blended” finance loans to support SPCG's pilot phase, USD 4M of which came from the IFC at market rates, with USD 8M at concessional rates from the CTF
  • The IFC and CTF provided blended finance (capital on below-market terms, lowering its overall cost) to support SPCG by providing financing that was unattainable due to the perceived risk in Thailand’s solar power sector

Stakeholders Involved

  • Solar Power Company Group (SPCG) – Oversaw the construction, operation and maintenance of solar farms
  • International Finance Corporation – Functioned as the primary financier and provided the commercial tranche of initial investment into SPCG
  • Clean Technology Fund – Provided concessional tranche of initial investment into SPCG


  • The initial USD 12M of blended finance unlocked over USD 800M from private investments primarily through debt provided by local commercial banks
  • As SPCG had the rights to a pipeline of 34 solar projects and was able to exceed its original goal of producing 204 MW, instead delivering 250 MW; by 2015, Thailand had more solar capacity than all of Southeast Asia combined
  • The blended finance approach reduced risk for private investors by enabling a pilot that demonstrated the project's financial viability, attracting further investment across numerous other solar farms in Thailand

Key lessons learnt

  • Governments can use blended finance from DFIs as a market-maker, piloting projects that create a track record for success in a particular sector, paving the way for future private investment that becomes available on a purely commercial basis
  • While blended finance may be necessary to finance high-risk projects, it should be complemented by the provision of robust project pipelines to allow private entities to spread initial due-diligence costs across multiple projects
  • Once multiple projects in a sector are successful, market participants develop the expertise to generate new products in that sector (e.g. once solar farms gained momentum in Thailand, SPCG expanded into providing solar roof systems for homes, improving the outlook for the solar sector in the country)