Ratchaburi Electricity Generating Holding has announced its short-term business plan, with the aim of boosting enterprise value and maintaining shareholders’ returns.
The three main approaches are exploring new investments, managing efficiency of main power plants and completing construction of new plants as planned.
The business plan aims to push the enterprise value to Bt188 billion by 2018.
Rum Herabat, chief executive officer of Ratch, said the company planned to seek new project acquisitions during the next two years and prioritise joint ventures with existing alliances and projects in its current operating bases in order to speed up the consideration process and effectively manage well-rounded risk factors, thanks to market experience and insight.
The potential projects under feasibility studies and negotiations include the 2,000-megawatt JAWA 7 plant in Indonesia, the 400MW Sekong 4 hydropower project in Laos, seven solar farms for the public sector in Thailand with combined capacity of 35MW, and a 2,000MW power plant in China.
“The JAWA 7 project, which is [a collaboration] with Banpu Group and already proposed for development, is under consideration by Indonesian authorities,” Rum said.
“Additionally, we have signed a joint development agreement with Lao World Engineering and Construction Co to develop the Sekong 4 hydropower project. LW is a subsidiary of Thai World Power Group, which is our partner in the Ratchaburi World Co-generation power plant.
“In addition, we have joined hands with government agencies to apply for solar-farm projects for the public sector. The seven proposed projects are in the Central and Eastern regions of Thailand, with total capacity of 35MW. We expect to win at least two projects.
“Also, the company expects to enter a joint-venture agreement for a power-plant project in China at the end of this year, marking our first step into China, a huge potential market,” he said.
According to the business plan, the company will continue to focus on managing the efficiency of key power plants. During the first nine months of 2015, the key power plants with combined equity capacity of 4,558MW, including the investment in EDL-Gen’s securities, generated significant revenues for the company.
In managing its efficiency, the company emphasises maintaining availability to ensure it meets the requirements of each power purchase agreement (PPA), managing its reliability to assure stability of the plants as per accepted standards, and controlling fuel usage as specified by the PPAs.
Construction management of new power plants is another focus of the plan. It is to ensure that all new plants are able to commence commercial operation as scheduled in order to boost revenue growth and maintain shareholders’ returns.
At present, six projects are under construction: the 626MW Unit 3 of Hongsa power plant (40-per-cent equity holding), with construction 95 per cent complete and scheduled for operation in 2016; the 132MW Nava Nakorn Co-generation power plant (40-per-cent equity holding), targeting operation in 2016 and with construction 80 per cent complete; two solar-farm projects in Japan with combined capacity of 33.51MW (60-per-cent equity holding), targeting operation in 2017; the 410MW Xe-Pian Xe-Namnoy hydroelectric power project (25-per-cent equity holding), targeting operation in 2019 and with construction 20 per cent complete; and the 100MW Berkprai Co-generation power plant (35-per-cent equity holding), which is conducting an environment impact assessment study.
Meanwhile, the 9.9-MW Song-khla Biomass power plant (40-per-cent equity holding) recently went into operation.
The total equity capacity of all these projects is about 464.7MW, which can boost enterprise value by Bt30.93 billion.
As of September 30, Ratch booked total assets of Bt97.13 billion and Bt45.11 billion in retained earnings.
For the first nine months of 2015, the company recorded profit of Bt2.34 billion, with total equity capacity of 6,578.12MW, divided into 6,117.31MW for projects in commercial operation and 460.81MW for projects under construction or development.