Egco outlines investment plan of B21bn

Construction News Laos

Egco outlines investment plan of B21bn

Partners sought for smaller projects

Electricity Generating Plc (Egco), the country’s second-largest private power producer, is considering investments worth 21 billion baht in total to build a new 800-megawatt power unit and three new small power producer (SPP) projects.

President Vinit Tangnoi said Egco was close to concluding talks with strategic partners for the planned SPP projects which would cost 2 billion baht each for generating capacity of about 120 megawatts.

Egco and the partners would take part in the next round of SPP licence bids for combined output of 2,000 MW, requiring capital of 6 billion baht. Winning bidders will be named early next year to supply electricity to the power grid between 2015 and 2021.

“We might invest in two to three new co-generation SPP projects. Investments will start in 2013 for the projects to be operational by 2015,” said Mr Vinit.

In a related development, Egco is preparing to negotiate with the Electricity Generating Authority of Thailand (Egat) to extend the power purchase agreement (PPA) with Egco’s Khanom Electricity Generating (Kegco) for five years beyond the scheduled expiry in 2016.

“By the end of next year, we are going to propose to Egat a more attractive power tariff if it agrees for us to renew the PPP. If not, we are going to invest in a new 1.5-billion-baht 800-megawatt plant at the existing site of Kegco,” Mr Vinit said.

At the same time, Egco’s negotiations to buy at least a 25% stake in a coal-fired power plant in the Philippines have been delayed as both sides have yet to agree on the price. A conclusion to the deal is now expected by the end of this year instead of mid-year as earlier expected.

Egco also hopes to conclude its acquisition of an additional 10% in the Nam Theun 2 hydropower plant from Italian-Thai Development (ITD), Thailand‘s largest listed contractor, by the year-end, Mr Vinit said.

Egco currently owns 25% of the project in Laos.

The company has also been conducting a feasibility study for mini hydropower plant in Laos. Egco Engineering and Serve Co (Esco) has signed a memorandum of understanding with SET-listed Eastern Water Resources Development and Management Plc and Laos PPNK Co for the joint investment.

Investments in Southeast Asia will be a major driver of the company’s growth in the years to come, said Mr Vinit.

Pikul Srisastra, Egco’s senior executive vice-president for finance, said the company’s net profit this year was likely to decline by 5-6% this year from 2009, mainly due to the lower contribution from its ageing power plants and a scheduled maintenance shutdown of the Kaeng Koi 2 plant.

In the first six months, net profit fell 6% year-on-year to 4.35 billion baht.


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