ADB's Work in Thailand

Despite the prolonged coronavirus disease (COVID-19) pandemic, Thailand’s economy grew by 2% in the first half of 2021. This is due to the continued expansion of merchandise exports in all markets and products and increase in private investment and public consumption. ADB has forecasted Thailand’s growth rate at 1% in 2021 and at 4% in 2022.

ADB supports Thailand in responding to the health, social, and economic impacts of the COVID-19 pandemic. In 2021, ADB provided a $1.5 billion loan to help the country mitigate the negative economic impact of the pandemic.

To date, ADB has committed 238 public sector loans, grants, and technical assistance totaling $7.4 billion to Thailand. Cumulative loan and grant disbursements to Thailand amount to $7.43 billion. These were financed by regular and concessional ordinary capital resources, and other special funds. ADB’s ongoing sovereign portfolio in Thailand includes 3 loans worth $1.6 billion.

ADB endorsed the country partnership strategy (CPS), 2021–2025, for Thailand in May 2021. The CPS aims to strengthen the country’s competitiveness, connectivity, resilience, and sustainability. Reflecting Thailand’s position as an upper middle-income country, the CPS lays out the three dimensions to ADB’s engagement strategy: “for Thailand,” “with Thailand,” and “in Thailand.”

The bank’s assistance also focuses on helping the country pursue regional development. ADB will use Thailand as a regional base to deliver its programs, taking advantage of its strategic location that allows it to host international organizations and regional companies, among others.

ADB’s sovereign lending supports Thailand in expanding its investment projects to achieve inclusive and sustainable economic growth. The Greater Mekong Subregion highway project, partially financed with ADB’s loan of $99.4 million, will upgrade 125 kilometers of national highways in the northeast of the country, and improve Thailand’s road safety management capacity. The project is scheduled to be completed by early 2022. ADB’s sovereign lending pipelines for 2022–2024 consists of three projects in transport and health sectors and a green finance and innovation facility, with a total amount of $1.15 billion.

ADB has been supporting Thailand’s capital markets’ foray into sustainable finance following the maiden bond issuances in 2020 with the Ministry of Finance (MOF) and the National Housing Authority (NHA), a state-owned enterprise. ADB’s support focused on developing the MOF and NHA’s sustainability frameworks, project selection, external review, and reporting processes. NHA continued its initiatives into 2021 with an issuance of B5 billion of green and sustainable bonds supported by ADB’s technical assistance. These landmark transactions attracted international recognition and awards. MOF also tapped the market for B97 billion across green and social bonds in 2021.

The Theppana Wind Farm, the first wind farm owned by Electricity Generating Public Company Limited (EGCO Group) of Thailand. Photo: ADB

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Thailand as of 31 December 2021 was $1.28 billion representing 9.12% of ADB’s total private sector portfolio

Operational challenges. Thailand has been promoting inclusive and sustainable growth and creating long-term innovative investment to boost its international competitiveness. However, its economic growth has recently been impeded by the prolonged COVID-19 pandemic, global economic shocks, disasters triggered by natural hazards, sociopolitical tensions, and relatively low investment. Other challenges to growth include persistent inequality, a weak education system, environmental degradation, and an aging population.

ADB is working with Thailand to help formulate and implement the structural reforms needed to address the country’s key development challenges. ADB will continue to deliver value added and timely knowledge support accompanied by suitable financing products and private sector investment and financing.

Knowledge Work

ADB continues to focus its technical assistance to Thailand by providing highly selective technical expertise and sharing knowledge solutions that will also benefit other developing member countries. Knowledge support is provided for green, social, and sustainability finance mobilization such as green bonds; urban public transport network integration and common fare development; climate resilient agriculture; and domestic resource mobilization and household debt. These knowledge activities are led by a team from the Thailand Resident Mission, supported by various ADB departments.

  ADB Projects in Thailand Project data sheets for loans, grants, TAs

Future Directions

In line with the CPS, ADB will continue to focus on providing a value-added range of solutions—across policy inputs, capacity building, world class knowledge-sharing, projects development — for Thailand and also with Thailand for Southeast Asia. Special focus on critical themes including green finance and sustainable recovery post-COVID-19, the bio-circular economy, resource mobilization through capital markets, and regional cooperation will be the key to driving new initiatives, activities, partnerships, as well as project pipelines in the transport, healthcare, urban, finance, and renewable energy sectors. As envisaged in the CPS, activities will seek to pro-actively further a closer coordination between ADB’s sovereign and nonsovereign programs to address constraints in private sector expansion and to catalyze private capital sources into sectors with the above themes. ADB will also look to supporting Thailand’s role and contribution for regional growth, especially given Thailand’s role as the host of the Asia-Pacific Economic Cooperation meetings for 2022.