Signing of a loan agreement for the Smart Ferry project along Chao Phraya River in Thailand (Private Sector Investment Finance)
On April 27, the Japan International Cooperation Agency (JICA) concluded a project-finance loan agreement with Thai company E Smart Transport Co., Ltd. Through the agreement, E Smart Transport Co., Ltd., sponsored by Energy Absolute Public Co., Ltd., introduces 27 electric ferries to the Chao Phraya River, which runs through the Thai capital of Bangkok. The ferries do not emit air pollutant and therefore, they are expected to contribute to the reduction of air pollution and improvement of the urban environment in the Bangkok Metropolitan Region. This project is the first large scale introduction of electric ferries in the ASEAN region on a commercial base. The project will be implemented through co-financing with the Asian Development Bank (ADB), including concessional loan from the Clean Technology Fund (*1) which is managed by ADB, and the Export-Import Bank of Thailand.
Transportation in Bangkok is largely dependent on diesel-engine ferries, diesel public buses, and gasoline vehicles, and as a consequence, urban environmental issues such as air pollution and traffic congestion are becoming more serious. Until now, JICA has supported building clean public transportation and introducing measures to reduce air pollution in the Bangkok Metropolitan Region through the provision of Japanese ODA loans for the development of urban railways, technical assistance to formulate traffic improvement master plans for the Bangkok Metropolitan Region, and technical cooperation for preventing and reducing air pollution such as PM2.5.
The electric ferry
The Chao Phraya River, the main river running through Bangkok serves as a main canal of transportation for Bangkok residents and ferries on the river carry approximately 50,000 passengers every day (the pre-pandemic average, last measured in 2019). The diesel ferries emit nitrogen oxides (NOx) and PM2.5 and cause the air pollution in the Bangkok Metropolitan Region. The project aims to contribute to the reduction of air pollution and improvement of urban environmental issues in this region by introducing and operating electric ferries on the Chao Phraya River and in doing so, the project will contribute to SDGs Goals 11 (Sustainable cities and communities), 13 (Climate action) and 17 (Partnership for the goals).
Energy Absolute Public Co., Ltd. is a leading Thai company in the alternative energy field, developed large scale solar and wind power generation, produces clean energy fuels, as well as introduces charging stations for electric vehicles in Thailand. This Smart Ferry project is expected to promote electrification of other modes of transportation in Bangkok.
This project is the first in Thailand to be directly funded by private sector investment finance since JICA resumed this type of overseas finance in 2012. It will also contribute to the promotion of green investment in the "Initiative on Overseas Loan and Investment for ASEAN (*2)."
(*1) The Clean Technology Fund provides new large-scale financial resources to invest in clean technology projects in developing countries, which contribute to the demonstration, deployment, and transfer of low-carbon technologies with a significant potential for long-term greenhouse gas emissions savings.
(*2) Initiative on Overseas Loan and Investment for ASEAN