Poor Community in Chon Buri to Benefit from 1st World Bank-Supported Carbon-Finance Project in Thailand

 Contact
Waraporn Hirunwatsiri
whirunwatsiri@worldbank.org
Pongtip Puvacharoen
ppuvacharoen@worldbank.org
+662-686-8300

CHON BURI, June 30, 2008 – The quality of life at a poor village in this coastal province of Thailand is about to get better, thanks to a community benefit plan supported by the World Bank.

Currently, Moo 10 village, in Chon Buri’s Koh Chan District, has only very basic infrastructure and limited social services. There is no clean drinking water, no lighting on the streets. Poor children cannot afford education. Deteriorating soil quality has led to declining sugar cane production, further compounding poverty.

The community benefit plan will bring change. A facility to produce clean drinking water will be installed, so will street lights. Scholarships will be provided to poor students. A pilot project to help villagers increase their income and improve living conditions will also be developed and implemented – by the villagers themselves.

This community benefit plan is one component of the new Thailand AEP Livestock Waste Management Project – the first carbon-finance project in Thailand being supported by the World Bank. Livestock production is an important element of the Thai economy. However, livestock waste also causes major health and environmental impacts, and also contributes to the country’s annual greenhouse gas emissions. The Project will support the Thai Government’s effort to reduce greenhouse gas emissions by utilizing swine manure to generate electricity.

Under this Project, a system to process livestock waste will be installed at 10 pig farms in Chon Buri and Ratchaburi Provinces, located near the Mae Klong and Tha Chin river basins. Together these farms own a total of 131,000 pigs, producing a significant amount of swine manure each day. From the waste, biogas will be produced and then used to generate electricity for the farm.*

The Project is expected to generate a combined total of 6,250 kWh of electricity per day and reduce annual carbon dioxide emissions by a combined total of 58,000 tons. This emission reduction is marketable as carbon credits. The credits will then be purchased by the Community Development Carbon Fund (CDCF), administered by the World Bank.*

This is a unique project because it enables smaller pig farms to take part in what is known as the Clean Development Mechanism (CDM)* – by bundling the carbon emission reduction by all 10 farms, then selling it as one unit in a complex carbon market.

“This pilot project sends a signal to smaller swine farms throughout Thailand that they, too, can participate in and benefit from the CDM,” said Sirithan Pairoj-Boriboon, Executive Director, Thailand Greenhouse Gas Management Organization (Public Organization).  “I hope it will pave way for more projects like this to come in the future.”

This is also the first carbon-finance project being supported by the World Bank. It builds on Thailand’s experience as the beneficiary of the Livestock Waste Management in East Asia project, launched in 2006 and funded by the Global Environment Facility (GEF),* said Ian Porter, the World Bank’s Thailand Country Director.

“This Project is very much part of the broader partnership in environment between the Royal Thai Government and the World Bank Group,”  Porter said, referring to the Country Development Partnership in Environment (CDP-E).*

On Monday, the World Bank signed the agreement to purchase carbon credits with Advance Energy Plus Co. Ltd. (AEP), a consortium formed by a group of Thai experts with experience in energy and environmental projects. AEP will also act on behalf of the farmers to collectively document and market the resulting carbon credits, thus generating the added income to make participation advantageous to each farm.

“We are a small and new company, but our team has more then 10 years’ experience managing and financing 30 CDM and renewable energy projects in Thailand,” said Anat Prapasawad, AEP’s Managing Director.  “We are proud to be part of this Project because it enables smaller pig farmers to benefit from global carbon market. This Project will help pig farmers secure the capital to invest in an efficient waste management system, which will improve the local environment and help the country reduce greenhouse gas emissions.”
 
Apart from the environmental benefits, villagers living near the farms, like those in Chonburi’s Moo 10 village, will be able to improve their quality of life with support from the community benefit plan – a required component of any carbon-finance project funded by CDCF. Of the $7.72 million project cost, about $230,000 will be spent on community development initiatives at selected low-income villages with limited infrastructure and social services. 

Financial support to the Project comes from the CDCF, the GEF, and Methane-to-Markets, an international program set up to reduce methane emission. The Thai Government-owned Energy Conservation Fund also contributes to this project, through the Energy Research and Development Institute, Chiang Mai University. Participating farmers are also contributing to the investment cost.