Bangkok Post

Boonsong Kositchotethana

December 09, 2000

Banpu Plc, a coal and power group, is chasing stakes in two additional conventional power projects and interests in renewable energy schemes as part of its continued bid to expand its electricity portfolio.

The interest build-up focuses on schemes in Thailand although it is also on the lookout for investment in ventures in Vietnam and Indonesia where the company already has established business interests.

Nitikorn Tantitham, Banpu’s senior vice-president for power business, revealed the strategic move in line with the firm’s continuing plan to boost the power sector’s contribution to the overall business portfolio to 50% from 40% within the next three years.

The contribution of coal which has traditionally constituted the bulk of Banpu’s businesses would decline to 50% from 60%.

Mr Nitikorn declined to discuss the details of the search for new power interests, arguing it would complicate negotiations.

But he said that in general the two key areas were natural gas and coal-fired projects.

“We would prefer coal-fired to gas-run plants as we feel that Thailand may be too dependent on natural gas which now represents 60% of power needs,” he said.

Mr Nitikorn said the company was looking for renewable power projects that would take advantage of the government’s planned power tariff subsidy and sale to the national grid.

Banpu’s power portfolio build-up has been evident from its recent purchase of a 5.59% stake, or 81 million shares, in Ratchaburi Electricity Generating Holding Plc (REGH), the partially privatised state power utility that operates the huge gas-fired Ratchaburi power house.

The Ratchaburi stake and new power interests in the pipeline compensate for the sale of its 22% share in the Cogeneration Plc (Coco), the country’s largest small power producer, to the American energy concern Sithe Energies Inc.

Sithe, in turn, transferred the share to Tractebel, the Belgian energy arm of France-based Suez Lyonnaise des Eaux, which now owns a 62% stake in Coco.

Mr Nitikorn said although the REGH share price had slipped recently, to slightly over the par value of 10 baht, Banpu was not concerned as it had always considered the Coco shares a sound long-term investment.

Chanin Vongkusolkit, Banpu’s chief executive, said the Ratchaburi project was efficient and entailed minimum risk while complementing Banpu’s power business. The highest price paid by Banpu for REGH shares was 14.75 baht.

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