International Finance Corporation (IFC), a member of the World Bank Group, has proposed to sanction a $150 million sustainable loan to energy company RH International (Singapore) Corporation Pte Ltd (RHIS).
RHIS is a wholly-owned subsidiary of RATCH Group Public Company Ltd (RATCH), the largest private sector power generating company in Thailand. RHIS is also the investment holding company for all of RATCH’s international operations.
In a disclosure, IFC said RATCH will use the sustainable loan to increase its equity stake in renewable power company Fareast Renewable Development Pte Ltd (FRD).
RHIS holds a 50% stake in FRD, the major shareholder in Asahan-1 Hydroelectric Power project located in Asan River in Indonesia’s North Sumatra province.
RATCH will also use the IFC loan to take a minority shareholding in Thailand-based firm Principal Capital Public Company Ltd and other greenfield or existing renewable energy projects in emerging markets, including Vietnam, Indonesia, Thailand, and Lao.
The proposed loan to RHIS, which is guaranteed by RATCH, will be the first such financing by an infrastructure company in Thailand.
“This financing is expected to help further diversify RATCH’s funding base amid growing interest from investors for climate finance transactions,” IFC said.
Additionally, the proposed loan in RHIS is expected to lead to positive stakeholder effects arising from supporting several green and social projects.
The proposed usage of the loan is also expected to demonstrate to other infrastructure companies in Thailand the application of a sustainable finance framework that adopts international principles on project evaluation and selection, management of proceeds, and reporting, IFC stressed.
“This is expected to help the company effectively utilise relatively new financing instruments such as sustainable loans which would provide flexibility to fund a combination of eligible green and social projects,” it added.
RATCH is listed on the Stock Exchange of Thailand (SET) and is bound by the listing rules in Thailand. Electricity Generating Authority of Thailand (EGAT), a state-owned entity (SOE), is the single largest shareholder of RATCH with a holding of 45%. The remaining 55% is owned by public shareholders.
As part of its corporate mission, RATCH has set clearly defined sustainability goals, one of which is increasing the company’s renewable energy portfolio to 25% of total capacity by 2025, from 15.6% at present.