Thailand - Yanhee Multipurpose Project

R E S T R I C I Y I- TE Report No. TO-137a This rpnnrt was prepared for use within the DBnI,. Imir it available to others, the Bank assumes no responsibility to them for ine accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT APPRAISAL OF THE BHUMIPHOL (YANHEE) MULTIPLE PURPOSE PROJECT THAILAND August 12, 1957 nepartment of Toechnica1 Operatiors  CURRENCY EQUIVALENTS U.S. $i - V Baht 1 Baht 5 U .S. $ . 05 100,UUU Baht a U.S. $50U0U 1,000,000 Baht a U.S. $50,000  APPRAIS-~L O^F3TEE HUu-.PHOL (-ANHEE) MULTIPLE-PR)PPOSE PROVEJET T H A I L A N D TABLE OF CONTETNTS CHAPTER PAGE Summary. . . . . . . . . . . . . . . . . . . . . . . . . . I Introduction . . . . . . . . . . . . . . . . . . . . . . . 1 II The Project. . . . . . . . . . . . . . . . . . . . . . . . 3 Cost of the Project, Initial Stage . . . . . . . . . 4 Status of Work on the Project. . . . . . . . . . . . 6 Schodule of Construction . . . . . . . . . . . . . . 6 Schedule of Expenditures, Initial Stage. . . . . . . 6 Organization to Construct the Project. . . . . . . . 6 Other Related Facilities Required. . . . . . . . . . 7 Organization to Operate the Yanhee Project . . . . . 8 Organizations to DistrIbute Energy . . . . . . . . . 9 III Benefits to Agriculture and Navigation . . . . . . . . . . 10 Previous Bank Loan for Irrigation. . . . . . . . . . 10 Irrigation and Flood Protection Benefits from Yanhee . . . . . . . . . . 10 Benefits to Navigation . . . . . . . . .. . . . . . 12 IV The Power Market .................... . 14 Area to be Served. . . . . . . . . . . . . . . . . . 14 Existing Generating Capacity . . . . . . . . . . . . 14 Sales of Energv. . . . . . . . . . . . . . . . . . . 15 Estimates of Future Load Growth. . . . . . . . . . . 16 Growth in Demand from 1Q97 to 1Q6 . . . . . . . 17 Growth in Demand after 1962. . . . . . . . . . . . . 18 V Economic Analysis of Power Investment. . . . . . . . . . . 21 Cost Allocations .21 Po1hlility o'f t'he TTJs of Lignite in ThermalPlants 21 Comparison of Yanhee with Thermal Plants Ustng Imported - uels . . . . . . . . . . . . . . .22 Return of Additional Investment in Yanhee over The.mal . . . . . . . . . . . . . . . .A22  TABLE OF CONTENTS (Continued) VI Financial Aspects. . . . . . . . . . . . . . . . . . . 23 Financing the Investments Required . . . . . . . . . 23 Existing Tariffs and Revenue per Kilowatt-Rnuv . . Prepent Cost of Production . . . . . . . . . . . . . 24 Estimated Revenues from Wholees1A -Aa - - - - - - 2-4- Future Financial Position of the Yanhee RlectricitY Author'ity. .26 Debt Service Coverage. . . . . . . . . . . . . . . . 27 VII Conclusions and Reccmmendations. . . . . . . . . . . . . . 28 ANNTTRS Chart: Forecast of Load Growt+h and Capacity Requirements Following Page 18 Map: Yanhee Project - Initial Stage: Following Page 29 A Comparison of Steam/Diesel Alternative 11.+ LW JL.L U Installed cLU. a n Yarhee Eiid. of Rport B F~~'Loreca st ofP Incom --- em t C.4--4--art . L',DLI 4J. L LLIUVU~ Qt. W1 WIL1LIU~ UUtU.II Cash Flow - Case I End of Report C Forecast of Income Statements and Cash Flow - Case II End of Report D F orecast of Income Statements and Cash Flow - Case III End of Report E Pro Forma Balance Sheets - Yanhee Electricity Authority End of Report  A t1 n A f r nr' n ..rr'.............. ,It ____/wPA ^ 1...................... APPRASLAL F iM BHITMIPHOL kIYARn-1E.J jVjjjMIPLE-Pj-IPOSE PROJECT THA ILA ND SUIARY i. The Government of Thailand has asked the Bank to make a loan to finance the estimated foreign exchange costs ($66 million, including in- terest during construction) of the first stage of the Yanhee multi-purpose project. ii. The project would consist of a large dam, which would create a reservoir with a capacitv of some 12 billion cubic meters; to be construtetir on the Ping River (one of the main tributaries of the Chao Phya River), some 420 kilometers northwest of Bangkok (sAe mnA:l two sptllway tunnels to dis- charge unusually large floods; a powerhouse at the foot of the dam with an ultimate canacitv of 960.000 ki- of wh-nhk 4LonAn kw wnuildh be instnlled itn the first stage; and transmission lines to load centers in the central plain and Bangkok. The cost of ahout $700 pnr kw of i-f'-!1nAlled capacity for the first two units is high,but this cost,when full development is achieved, rironR to shout $32O per in.c ThIs is reasonable, particularly in view of the s-ubstantial agricultural benefits described below for which no part of the investment is nllnnnccled iii- T e ' -pro4je t would be u VCRa s, eV 4,.- s4w;VV VV f V,n ta - Tmp1 +U d +lt trr T.to+er for irrigation, and to provide water for the generation of power. It would also improve navIgatIon conditions on the Chao Pya river. Triv.,,W ,n4ane+ has 'keen desgn-ed by competent consultants -Who have * L~~AJ ~4- LA~J0LA 'S flLLO LJOO