Egco plans B7bn budget to expand

Construction News Laos

Egco Group Plc, the country’s second-largest private power producer, plans to spend seven billion baht this year to expand capacity in keeping with demand growth.

President Vinit Tangnoi said the major investments included US$215 million to double Egco’s stake in a Philippine venture, and one billion baht to expand solar power production from 73 megawatts to 84 megawatts in Lop Buri.

Egco late last year signed an acquisition agreement to purchase another 26% in Quezon Power (Philippines), raising its stake in the Philippine venture to 52%.

Quezon Power operates a 460- megawatt coal-fired plant, a 31-kilometre, 230-kilovolt transmission line and related infrastructure in Quezon province.

Mr Vinit said the company was also considering an additional budget to build three new plants for which it received licences from the Electricity Generating Authority of Thailand (Egat) a week ago. The plants’ combined capacity would be 325 MW.

The three licences were awarded under the Energy Ministry’s small power producer (SPP) scheme. The ventures _ TJ Cogen Co, TP Cogen Co and SK Cogen Co _ are expected to operate 2016.

As well, he said, Egco was reviewing a budget estimated at 13 billion baht from 2012-19 for the Xayaburi hydropower plant in Laos, in which it recently acquired a 12.5% stake.

The SET-listed construction company Ch. Karnchang Plc is the major shareholder in Xayaburi, where construction will start soon. The plant is expected to begin operating in January 2019 with total capacity of 1,285 MW.

“We expect that our power capacity will increase to 5,000 MW within next five years from 4,361 MW currently,” said Mr Vinit.

Egco currently has interests in 14 power plants in Thailand, Laos and the Philippines, accounting for about 12% of Thailand’s generating capacity.

The company has is looking to expand capacity through mergers and acquisitions in the region, including an investment in Indonesia that is expected to be finalised later this month.

Egco also plans to negotiate with Egat to extend the power purchase agreement for its gas-fired Rayong power plant by another five years from its expiry date in 2014.

The 1,232-MW Rayong plant accounted for 501 million baht or 7% of Egco’s net profit last year.

The agreement for its 824-megawatt Khanom plant, meanwhile, is scheduled to expire in 2016. The company is ready to negotiate with Egat to extend the agreement or it may consider building a new power generator on the existing site, he said.

EGCO shares closed yesterday on the Stock Exchange of Thailand at 95.25 baht, down two baht, in trade worth 17.9 million baht.


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