Structured as twin projects via the same shareholder structure, the THB6.653 billion 90MW First Korat Wind (FKW) project and the THB6.087 billion 90MW KR Two (KR2) project together form the first large scale wind project in Thailand and the largest wind farm in south-east Asia.

Sponsored by Aeolus Power (60%) – itself 73% owned by Wind Energy Holding and 27% by Demco - Chubu Electric (20%) and Ratchaburi Generating (20%), the projects are located in Nakhon Ratchasrima Provinces (Korat) and will each accommodate up to 45 Siemens 2.3MW SWT-2.3-101 wind turbines (suitable for a low to medium wind climate).

Siemens is supplying the equipment on a fixed-price supply contract and the sponsors are providing construction guarantees to lenders. The plants are expected to go into commercial operation in October 2012 (FKW) and February 2013 (KR2).

The projects benefit from Thailand’s small power producer program (SPP) adder subsidy. Similar to feed-in tariffs, the adder rate is 4.5 Baht/kWh ($0.15/kWh) for farms under 50MW and 3.5 Baht/kWh for larger projects. The rate is fixed for 10 years.

The sponsors also signed 100% power purchase agreements with EGAT in December 2010. Those PPAs are initially for five years but are automatically extended in five-year increments for the life of the projects.

The financings for both projects - provided by Kasikornbank as MLA and Siam Commercial Bank as arranger – mirror each other. The FKW facility comprises a THB4.657 billion 12-year A tranche and a THB25 million working capital facility bolstered by THB1.996 billion of equity.

The KR2 facility comprises a 12-year THB4.26 billion A tranche and a THB25 million working capital facility with THB1.827 billion of equity. The debt pricing on both facilities is said to be attractive and is swapped into a fixed interest rate.

The projects are a major vote of confidence in Thailand’s SPP programme and are already providing the template for further utility scale wind schemes.

Aeolus’ parent company Wind Energy Holding announced plans at the beginning of the year for a further three 90MW farms in Korat province and is seeking equity investors and lenders for the scheme.

Financings for these projects are still some way off, but when they happen they are likely to be very similar to FKW and KR2.

First Korat Wind Company and KR Two Company
Status: Financial close 27 September 2011
Description: First large-scale wind portfolio financing in Thailand
Total debt: THB8.9 billion
Sponsors: Aeolus Power; Chubu Electric; Ratchaburi Energy Generating Holding
MLA and financial adviser: Kasikornbank
Arranger: Siam Commercial Bank
Lender legal counsel: Linklaters
Sponsor legal counsel: Chandler and Thong-Ek
Lender technical consultancy: Mott MacDonald