Thailand attracts renewed interest among power companies

Bangkokà‚–Power plant developers are signaling a renewed interest in Thailand.

International Power PLC, a global business spun off last October from the UK’s National Power PLC, is seeking to build on its existing single Thai power plant with the acquisition of stakes in three power generation projects.

In addition, Japan’s Sumitomo Corp. and Switzerland’s Electrowatt-Ekono say they want to pursue power projects in the country.

“Having one SPP (small power producer) project with a 110 MW capacity is not an ideal situation,” said David Leich, CEO of Thai National Power Co (TNP), a local subsidiary of International Power PLC.

Acquiring an interest in two more small SPPs and a larger independent power producer (IPP) projects would enhance the company’s value, he said.

Though International Power has expertise in developing coal-fired power plants in the UK, Leich ruled out any interest in the two large coal-fired IPP projects in the southern Thai province of Prachuab Khiri Khan.

The two coal-fired projectsà‚–Union Power Development Co’s 1,400 MW Hin Krut plant and Gulf Power Generation’s 700 MW Bor Nok facility à‚–have been vigorously opposed by local residents on environmental grounds.

Villagers blocked the southern highway in December 1998 in protest. The government then decided to hold public hearings on the projects. TNP has indicated a preference for projects using clean fuelà‚–a reference to natural gas.

The British power firm on Jan. 11 was handed over a 110 MW natural gas-fired combined cycle plant from the contractor, a consortium of Electrowatt-Ekono and Sumitomo Corp.

Located about 140 km southeast of Bangkok in Rayong, the $90 million Pluak Daeng facility consists of two GE Frame 6 gas turbines with an output of 37 MW each and another 38 MW Kawasaki steam turbine unit. In addition, the facility can produce 20 tonnes-hr of steam.

Debt refinancing
TNP has contracted to sell 90 MW of electricity to the Electricity Generating Authority of Thailand (EGAT) under a 25-year deal. Its remaining power generating capacity and steam is sold to industries at Siam Industrial Park, Pluak Daeng, Rayong, where the TNP project is located.

International Power has 39 power plants in operation, under construction, and advanced development worldwide with a total net capacity of 18,678 MW. Twelve of them are in Asia with a capacity of 2,842 MW.

Meanwhile, TNP is seeking to refinance up $60 million debt for its Rayong works in order to improve the project’s cash flow.The firm is in talks with several international banks on the possibility of forming a syndicate to refinance the credit, an exercise that is expected to close in April.

Separately, Sumitomo said it is also investigating investment opportunities and equity participation in IPP and SPP projects in Thailand.

Yoshihiko Taoka, general manager of the electricity machinery and project development department of Sumitomo Corp. Thailand, said the company is trying to identify specific projects for its first power investment in Thailand.

The investment would complement contracts to build power plants in Thailand, a traditional business strategy of Sumitomo, he said. Meanwhile, Electrowatt-Ekono, the Swiss electrical engineer, is diversifying from electrical consulting services to developing power projects in Thailand, said Richard Pinnock, managing director Electrowatt-Ekono (Thailand) Ltd.

The Swiss firm already has a 5% share in Amata Power, a Thai-based SPP firm. Electrowatt-Ekono has yet to find a suitable power project for investment.

Power plant developers such as Thai National Power Co., Sumitomo, and Electrowatt-Ekono are signaling a renewed interest in projects in Thailand.

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