Thai EGCO firm eyes power plants in Laos, Sudan
Oct 17, 2005 (BANGKOK) — Electricity Generating PCL (EGCO), Thailand’s second biggest private power producer, said on Monday it was looking to expand in Laos and Sudan as part of an overseas investment drive.
“We want to invest more in foreign countries and return should not be lower than 12-13 percent,” said Visit Akaravinak, president of EGCO, which aims to boost its foreign-to-domestic investment ratio to 30 percent from 10 percent.
Talks with Malaysian construction firm Gamuda Bhd to build a 400-MW plant at the Nam Theun I hydropower project in Laos should be concluded by the end of 2005, he said.
EGCO, 22 percent-owned by Hong Kong utility CLP Holdings , has a capacity of 2,414 megawatts (MW), accounting for about 9-10 percent of Thailand’s generating capacity. State-run EGAT PCL owns 25 percent of the company.
Visit told Reuters that EGCO planned to expand its capacity by 10 percent per year over the next five years, adding an additional 1,000 MW of output.
EGCO also planned to join with energy firm PTT PCL , and power generator EGAT to build a 300-MW power plant in Sudan, where EGCO has had a minor presence for 3 years.
The venture, expected to start by 2007 and cost $150-$240 million depending on the type of plant, would open up oil and gas exploration opportunities for PTT in the African country.
EGCO, which owns 25 percent of the 1,070-MW Nam Theun II plant in Laos, was also looking for investment opportunities in Vietnam and Cambodia, but Visit gave no details.
At home, he expected to conclude a long-delayed plan to buy a 25 percent stake in BLCP, which operates a 1,400-MW power plant at Rayong, by the end of 2005.
PARTNERS WANTED
Visit said he expected flat revenues in 2005 and 2006, compared with last year, until new projects come on line.
“Our revenues for this year and next year will not be outstanding, but we will realise more when the expansion at Khang Khoi plant completed,” Visit said.
The 1,468-MW Khang Khoi II project, in which EGCO has a 50 percent stake, is due to begin operating in 2007 and the Nam Theun II plant is slated to start in 2009.
Some 13 analysts polled by Reuters Estimates had a 2005 consensus net profit estimate of 4.97 billion baht, up 6.6 percent from 2004. In the first half of 2005, it made a net profit of 2.34 billion baht.
EGCO was seeking partners to bid for new power projects, Visit said, expecting the company to win at least 30 percent of the new capacity to be auctioned next year.
“Our policy is to buy stakes in small power producers and IPPs,” he said referring to independent power producers (IPPs) such as EGCO and Ratchaburi Electricity Generating PCL .
“We want to have partners who can bring us low financial costs. This will boost our competitive advantage in the bidding.”
The government plans to invite IPPs to bid next year for the right to produce up to 13,000 MW of electricity.
State-run EGAT will produce 50 percent of any new capacity from 2011 to 2015, with the rest open to bids from IPPs.
EGCO has cash to finance expansion over the next 7 years, but it may seek new loans if it won another IPP contract, Visit said.
The company is currently negotiating with creditors to refinance 4 billion baht worth of debt at its Rayong Electricity Generating Co unit. It expected a deal in early 2006.
“This will help reduce costs and boost profits,” he said.
(Reuters)