Udon Thani Integrated Biomass Supply Chain Initiative

A Scalable Climate, Clean-Air, and Rural-Income Platform for Northeast Thailand

Udon Thani Province is one of the most agriculturally significant provinces in Northeastern Thailand, with extensive rice cultivation and sugarcane farming spread across 1,867 villages. As Thailand advances the implementation of its Climate Change Act and prepares for the imminent enactment of the Clean Air Act, Udon Thani stands at a critical transition point—where agricultural residue management must shift from open burning toward structured, low-carbon utilization.

In response to this policy momentum, REpow has formally engaged with the Provincial Agricultural Office and the Provincial Farmers Council of Udon Thani to propose a province-wide biomass supply-chain transformation program centered on rice straw and sugarcane leaves. Both institutions have expressed strong interest in advancing this initiative as a practical solution to PM₂.₅ pollution, greenhouse-gas mitigation, and rural income stabilization.

Project Concept Overview

The proposed initiative establishes a fully integrated biomass value chain that connects village-level collection, district-scale processing, and regional renewable-energy generation, ensuring mutual reinforcement across all components.

1. Biomass Collection & Storage Infrastructure

• Agricultural residues (rice straw and sugarcane leaves) are collected from 1,867 villages.

• Biomass is aggregated into 153 sub-district (Tambon) biomass warehouses, serving as standardized storage and logistics hubs.

• Farmers receive direct income for residues that were previously burned or discarded.

2. Dual Utilization of Biomass

Collected biomass is utilized in two parallel value streams:

(a) Biomass Power Generation

• Development of four (4) biomass power plants, each serving a defined cluster of districts.

• Plants are strategically co-located with processing facilities to minimize logistics costs.

• These plants provide long-term baseload renewable electricity once licensing and construction are completed.

(b) Organic Compost Production

• Establishment of four (4) biomass processing and organic compost plants, matching the same district clusters as the power plants.

• Rice straw and sugarcane leaves are combined with locally available livestock manure to produce certified organic compost.

• Compost is supplied back to farmers, improving soil health and reducing dependence on chemical fertilizers.

Phased Monetization Logic (De-Risked Development)

A key strength of this initiative is its time-phased revenue model, designed to address Thailand’s regulatory realities.

• Licensing and construction of biomass power plants require multiple years.

• To avoid income disruption for farmers during this period, organic compost production is activated immediately.

Years 1–5 (Pre-Power-Plant COD)

• Biomass collection and compost production generate early cash flow.

• Farmers earn stable income from residue supply.

• Feedstock logistics, community trust, and operational discipline are established at scale.

Post-COD (Power Plants Operational)

• Rice straw and sugarcane leaves are redirected primarily to biomass power plants as fuel.

• Compost plants transition their main feedstock from straw/leaves to cassava rhizomes and other agricultural by-products, ensuring continued operation and revenue.

This integrated design ensures that no asset becomes stranded, and that each component strengthens the others over time.

Climate, Air-Quality, and Social Impact

• Elimination of open burning across 1,867 villages → significant PM₂.₅ reduction.

• Measurable GHG avoidance aligned with national climate targets.

• Long-term income diversification for farmers through biomass sales and compost use.

• Strong alignment with Thailand’s Bio-Circular-Green (BCG) Economy Model and provincial clean-air strategies.

Proposed Equity Structure – Partnership Model

To balance community inclusion, institutional discipline, and capital scalability, REpow proposes the following equity structure for the Udon Thani Integrated Biomass Supply Chain Initiative:

Equity Allocation

• Community Enterprises: 10–20%

• REpow + Thai Strategic Partners: 10–20%

• Development Finance Institutions (DFIs): 40%

• Climate Venture Capital Funds: 30%

Strategic Rationale

Our partnership model designs to create a stable, bankable platform while ensuring that local communities remain meaningful stakeholders in the biomass value chain.

Community Enterprises (10–20%)

Community enterprises—formed at village or sub-district level—participate as long-term equity partners, representing farmers engaged in biomass collection and supply.

Their ownership:

• Strengthens local legitimacy and social acceptance

• Aligns farmer incentives with long-term project performance

• Supports DFI mandates on inclusion and shared value creation

Community participation may be structured through a holding entity or cooperative trust to ensure governance efficiency and avoid fragmentation.

REpow + Thai Strategic Partners (10–20%)

REpow and its Thai partners retain a meaningful equity position as project developer, integrator, and long-term operator, ensuring strong alignment of interests and long-term commitment to project performance. 

We ensure:

• Strong “skin in the game”

• Continuity of technical execution and stakeholder coordination

• Alignment between development, construction, and operations

Development Finance Institutions (40%)

DFIs act as anchor equity investors, providing:

• Long-term patient capital

• ESG governance oversight aligned with IFC Performance Standards

• Credibility with regulators, lenders, and public-sector counterparts

Their participation reinforces the project’s role as climate-aligned public-interest infrastructure.

Climate Venture Capital Funds (30%)

Climate VCs provide growth-oriented equity, supporting:

• Execution speed and replication across additional provinces

• Innovation in logistics, processing, and digital MRV systems

• Portfolio scaling beyond the initial Udon Thani platform

VC participation also supports future exit pathways through portfolio aggregation or strategic sale.

Summary for Investors

The proposed Community–Institutional Partnership Model enables REpow to scale biomass infrastructure rapidly while delivering measurable climate, clean-air, and social outcomes.

It offers DFIs and Climate VCs a balanced risk-return profile, combining strong local participation with professional governance and long-term scalability.