Private Thai power generator seeks three plant deals in Laos and Vietnam worth US$1.9b
Egco Group Plc (Egco), the country’s second largest private power producer, is pursuing investments in three power plants in Laos and Vietnam worth a total of US$1.9 billion. Talks with a Chinese company, the Vietnamese government and a Laotian state agency are expected to be concluded this year, Egco president Visit Akaravinak said yesterday.
He said that acquiring holdings in three power plants in Laos and Vietnam was in line with a policy to invest more abroad in order to meet its capacity expansion target of 5% a year.
The company lost an opportunity to expand its domestic power capacity after failing to secure a new independent power producer (IPP) licence during bidding late last year.
At the Nam Ou hydropower plant in Laos, Egco is negotiating for a stake of between 25% and 30% with the project owner, Sino Hydro Co of China.
Sino Hydro won a licence from the Vientiane government to build and operate the 1,300-megawatt plant worth US$1.6 billion.
Egco has already signed a preliminary agreement with the Chinese company to acquire shares in the project. ”We will need to seek approval from the executive board for the investment prior to any discussions with partners,” Visit said.
In Vietnam, Egco is talking with a prospective local partner to bid for IPP ventures. It will propose a 200-MW coal-fired plant worth US$260 million and a 100-MW hydroelectricity project worth US$60 million. Further details remain to be decided.
Egco has set aside a capital expenditure budget this year of 1.29 billion baht to finance its activities at the 523-MW Nam Theun 1 and 920-MW Nam Theun II plants in Laos, which are joint ventures between Thai producers and the Electricity Generating Authority of Thailand.
Egco and Gamuda of Malaysia each hold 40% in Nam Theun I and the Laotian government holds the rest. It is expected to start operating in 2009.
Egco and the Laotian government each hold 25% in Nam Theun II, Electricite{aac} de France 35% and the SET-listed contractor Italian-Thai Development 15%.
Nam Theun II will be completed by 2014 and a power purchasing agreement (PPA) is expected to be signed soon with Egat.
Locally, Egco will negotiate with the Energy Ministry and Egat to extend its concessions at the Rayong and Khanom power generating units, which are due to expire in 2013 and 2014 respectively. Egat can choose to renew the concession or call new bids open to all prospective operators.
The two plants currently account for 80% of Egco’s total revenue.
Egco reported a consolidated net profit of 8.4 billion baht last year, up 40% from 2006, driven mainly by additional power capacity from its BLCP coal-fired plant that became fully operational last year. Egco holds a 50% stake in the 1,434-MW plant, which generated nearly half of last year’s net profit.
The 50%-owned Kaeng Khoi power plant started to contribute income last year at around 10% of net profit.
Egco shares closed yesterday on the Stock Exchange of Thailand at 98.50 baht, down 50 satang, in trade worth 145.2 million baht.
Yuthana Praiwan
Category: Business
