GuarantCo provides $13.5m facility to TBEC for long term senior debt


GuarantCo has provided a THB 425m ($13.5m equivalent) guarantee facility to support Thai Biogas Energy Company (TBEC)’s in building wastewater-to-biogas plants in rural Thailand.

 

Established by PEMF (a fund supported by Finnfund) and ATE (a fund supported by Prince Moulay Alaoui of Morocco) in 2003, TBEC is today the leading biogas producer in the Mekong Region with 8 power plants in Thailand and 1 plant in Lao PDR. TBEC’s plants clean waste water from various agri-factories, generating biogas in the process. The biogas is partly supplied to the agri-factories to meet their energy needs, replacing polluting coal/ diesel or HFO. The rest of the biogas is used to produce electricity for supply to the local grid. TBEC’s plants reduce local air and water pollution, provide renewable energy & electricity, and help in mitigating climate change through methane capture.

 

TBEC has been recognized as a premium biogas company with awards such as ASEAN Energy Award (2010), Thailand Energy Award (2010, 2014, 2014), Crown Standard (2009) and Gold Standard (2011).

 

Although TBEC’s plants have high environmental and other developmental impacts, TBEC faces challenges in raising long term finance as its requirements are too small for most local banks’ Project Finance teams, and too unconventional for the banks’ SME Financing teams. Using GuarantCo’s credit enhancement facility however, TBEC was able to obtain a loan of THB 402m ($13m equivalent) from ICBC Thailand. This will enable TBEC to construct two plants with total capacity to treat 600 000 m3 of waste water per year, and generating 7 MW of electricity to meet local electricity demand.

 

GuarantCo’s support enables TBEC to move forward in its plans to expand into other underdeveloped countries in the Mekong Region. Such expansion plans will be further helped and accelerated by Viability Gap Funding grant sanctioned by the PIDG Technical Assistance Facility


Gustaf Godenhielm, Managing Director of TBEC
“This new partnership with ICBC (Thai) and GuarantCo further strengthens our already good financial resources and will facilitate accelerated growth. With an asset base of THB 1 Billion, growth of 2-3 projects per year (equivalent  to an increase in assets of THB 300-450 million) we are rapidly cementing our position as undisputed market leader in biogas.“

 

Andrew Bainbridge, Chairman of GuarantCo
“Renewable energy is expected to be at the forefront of efforts to tackle climate change, which is rightly recognised as one of the major problems facing the world today. We are therefore excited to support TBEC in financing its highly developmental biogas plants, which have the added advantages of tackling local pollution and boosting rural incomes. Having proven its business model, TBEC is poised to enter its next phase of growth and we look forward to further supporting TBEC's expansion into the greater Mekong region"

 

Dr.Ye Hu,   Chairman of ICBC (Thai)
“ICBC (Thai) has always committed to support sustainable economic development in Thailand through our innovative financial solutions and expertise in international financing. We are pleased to provide credit facility to a leading renewable energy developer like TBEC who possesses strong technology know-how and expertise in the renewable energy. We are delighted with the new partnership with TBEC and GuarantCo to support new projects which display great potential and yield environmental benefits, as well as contributing to the development in the rural area of Thailand in the long run."