Year 2010

 August

Egco to invest Bt6 bn in 3 co-generation plants

By Nalin Vibonchart

Electricity Generating will invest about Bt6 billion in the next few years to establish three co-generation power plants to sell electricity to the grid under a new round of purchasing from small power producers (SPPs).

Egco president Vinit Tangnoi yesterday said the electricity capacity for each plant would be about 120-130 megawatts, but the company would sell 90MW from each facility to the grid in accordance with SPP conditions. A total of 270MW will therefore be sold to the national grid from the three plants.

He said Egco already had partners to co-invest in the new co-generation plants, but declined to disclose details.

He said it was not yet known when the power plants would be built, as it depended on the Energy Industry finalising the timing for purchasing electricity from SPPs. However, he added, the new round of electricity purchases would run from 2015 until 2021, which meant construction would likely begin around 2013.

Besides, Egco will submit a proposal to the Electricity Generating Authority of Thailand to renew the power-purchase agreement (PPA) for the Khanom power plant in Nakhon Si Thammarat after the current contract expires in 2016.

Egco will propose that Egat buy 600MW of electricity from Khanom for a further five years, which is the appropriate duration if it is not going to have to engage in major investment to overhaul the plant.

However, Vinit said, if Egat decided not to renew the PPA and opted to purchase electricity from another power plant, Egco could invest Bt15 billion to establish an 800MW facility to sell electricity to the state agency.

Meanwhile, he said the PPA of Egco's Rayong power plant was due to expire in 2014 and the company would submit a proposal to Egat at the end of this year to renew it for another five years.

As with the Khanom plant, if Egat chooses not to renew the contract, the company could invest another Bt15 billion for an 800MW power plant.

Egco has cash on hand of Bt6 billion and a ceiling to borrow about Bt30 billion for the new investment.

On the overseas front, Vinit said the company had concluded an agreement with Italian-Thai Development â?? a Nam Theun 2 project stakeholder and the contractor for the Laos project â?? to purchase a 10-per-cent stake that Ital-Thai holds in the project, while the remaining 5 per cent will be sold to EDF, another stakeholder.

If the transaction can be concluded this year, Egco will recognise the revenue in 2011.

The company also expects to conclude deals to acquire stakes in two power plants in the Philippines and Indonesia by the end of this year.

Pikul Srisastra, Egco senior executive vice president for finance and corporate services, said the company's net profit this year was likely to decline by 5-6 per cent from Bt7.93 billion last year because of the structure of PPA revenue.

Copyright 2010 Nation Multimedia GroupAll Rights Reserved

By The Nation (Thailand)

August 25, 2010

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