The main objectives of the Project as stated in the Staff Appraisal Report (SAR) dated April 5,
1995 were to: (a) assist EGAT in optimizing its investment. decisions and help meet the system's peak
power demand from the year 2000 onward at least-cost; (b) strengthen the environmental capabilities of
EGAT; and (c) assist the Government in rationalizing the bulk supply tariff to PEA and MEA as a prelude
to the corporatization and privatization of the generation/transmission and distribution utilities. In addition,
the Bank expected, during the Project's tenure, to continue rendering technical advice to the Govemment in
the implementation of power sub-sector and environmental reforms.
The project objectives were consistent with the Bank's Country Assistance Strategy (CAS), which
underscored development of infrastructure and improvement in environmental management as Thailand's
priority needs. Utilizing the surplus off-peak capacity of EGAT's large efficient thermal plants, the Project
provided the opportunity for a step increase in peaking capacity at a lower capital cost than that of gas
turbines, and its size was consistent with the Thai system's rapid demand growth in the early 1990s.
Through its long involvement, the Bank had contributed significantly to the Govemment's strategy to
induct private capital to meet the sector's massive investment needs, and progressively restructure,
corporatize and privatize the power industry. The Project provided a vehicle for the Bank's continued
assistance in least-cost investment planning, demand-side management and restructuring and privatization
of the power utilities.
Institutional development under the Project aptly focused on: (a) strengthening EGAT's
environmental management which was necessary for an environmentally and socially sustainable
development of a rapidly growing sector that had been coming under increasing scrutiny by Thai NGOs
and civil society. Bank's involvement also provided the opportunity to assist in demonstrating how
participation of affected people could ensure project success, which was sorely needed after the
unsatisfactory experience in the Pak Mun Hydropower Project; and (b) laying the foundations for a rational
bulk supply tariff structure, devoid of hidden subsidies, which was a prerequisite for the sector's effective
regulation.