Electricity provider Gulf JPNS has won a US$1.2bn 25-year credit facility from five local banks for the development of the Nong Saeng natural gas power project in Bangkok, Thailand.

The banks involved in the deal include the Asian Development Bank (ADB), the Japan Bank for International Cooperation (JBIC), Mizuho Corporate Bank, Kasikornbank and Siam Commercial Bank.

An ADB spokesperson tells GTR that the bank’s portion of the loan was US$170mn with a repayment period of 19 years. JBIC contributed US$272mn, while the commercial banks, Mizuho Corporate Bank, Kasikornbank and Siam Commercial Bank provided US$747mn.

The availability of long-term finance will give JPNS the ability to pay down the plant’s high upfront costs over a longer term, allowing it to provide low-cost energy to consumers in Thailand.

The 1,600 megawatt natural gas-fired plant will be constructed under a independent power producer arrangement to help meet Thailand’s rapidly increasing appetite for electricity. The plant is set to commence operations by 2014.

Daniel Wiedmer, ADB’s investment specialist, private sector operations department says: “This is the first large IPP project to reach financial close in Thailand since the 2008 global economic crisis. It incorporates state-of-the-art technology to generate electricity far more efficiently than coal-fired systems, which are the only domestic alternative for IPPs.”

PNS, the Thai subsidiary of J-Power will develop and operate the plant. The electricity will be sold to the state-owned Electricity Generating Authority of Thailand under a 25-year power purchase agreement.

Meanwhile, Thai energy firm PTT will supply the gas, and a group of companies led by Japan’s Mitsubishi Heavy Industries will build the facilities.

Affordably-priced power is crucial for supporting Thailand’s post-global crisis economic rebound, making Thai businesses competitive and for expanding livelihood opportunities to help reduce poverty, ADB says.