Siàƒ¢n Green, Managing Editor
BLCP Power Limited is developing the 1400 MW coal fired Map Ta Phut plant in Thailand. The award-winning project is the largest IPP to be developed in Thailand and is an important part of the Thai government’s power sector development strategy.
In 1995, the Electricity Generating Authority of Thailand (EGAT) selected independent power producer (IPP) BLCP Power Limited to construct a 1400 MW coal fired power plant at Map Ta Phut in Rayong Province, Thailand. Nearly ten years and one Asian financial crisis later, in August 2003, the project achieved financial close and construction was able to start.
The 1434 MW Map Ta Phut power plant will start supplying electricity to the grid in late 2006. The project is the largest IPP to be developed in Thailand and also represents the largest project financing into Thailand since the 1997 Asian financial crisis. The plant will help the Rayong region and Thailand as a whole to meet a rapidly rising growth in electricity demand.
Figure 1. Electricity demand in Thailand is forecast to grow at six per cent per year until 2016
The 2 x 717 MW project is located at the Map Ta Phut industrial estate in Rayong Province, 200 km southeast of Bangkok. Map Ta Phut has been chosen as one of the major industrial and economic centres for future development as part of Thailand’s Eastern Seaboard Development Pro-gramme. The estate includes a petrochemical complex, two refineries, several steel processing plants and a deepwater port.
Due to the growth of industrial and commercial centres such as Map Ta Phut, demand for power has been growing steadily in Thailand. In keeping with the rapid economic recovery that followed the financial crisis, electricity demand is forecast to rise by an average of six per cent per year through to 2016. To meet this rising demand, the government of Thailand is planning to expand the country’s power generation capacity from 25 380 MW in 2002 to 45 420 MW by 2016. Without the construction of new plants such as Map Ta Phut, Thailand could experience a power shortfall by 2008.
Map Ta Phut also forms an important part of the Thai government’s fuel diversification strategy. Thailand is a natural gas producing country, and currently depends on natural gas for 80 per cent of its electricity generation. The government is keen to promote the use of coal and other fuels, and Map Ta Phut will be one of the most modern coal fired facilities in the region when complete.
Construction of the plant will create 1800 temporary jobs for local unskilled and skilled workers and provide additional indirect jobs for local service and downstream industries. About 280 long-term operational jobs will be created at the plant itself.
The concept of a new power plant at Map Ta Phut began in 1994, when EGAT invited IPPs to submit proposals for the supply and sale of electric capacity. The solicitation was an open competitive bidding process and the bid submitted by a consortium which later became BLCP Power Ltd. was successfully selected.
Figure 2. The award-winning project finance deal signifies a new-found confidence in Asia’s power markets
BLCP was established in 1995 and is a 50:50 joint venture between Banpu Power Limited of Thailand, and CLP Power, a subsidiary of Hong Kong’s CLP Holdings. Banpu Power is a wholly owned subsidiary of Banpu Public Company Limited, Thailand’s largest coal supplier.
BLCP is developing Map Ta Phut on a build-own-operate (BOO) basis, and awarded the engineering, procurement and construction (EPC) contract to Japan’s Mitsubishi Heavy Industries (MHI). In 1997 it signed a 25-year power purchase agreement (PPA) with EGAT for the sale of electricity from Map Ta Phut. High quality coal will be shipped to the plant by Australian Coal Holdings Pty Ltd. under a 25-year fuel supply agreement.
In August 2003, BLCP achieved financial close on the project, signing a financial agreement with a consortium of of Thai and foreign financial institutions. The first draw down was made on 15 September 2003.
The Map Ta Phut project will be financed on a limited recourse basis with debt of $1.043 billion and equity of about $324 million, according to the Asian Development Bank (ADB). ADB has provided a direct loan of $40 million, a complementary financing scheme loan of up to $100 million, and offshore cofinancing of $70 million under the ADB political risk guarantee.
Figure 3. The growth of industrial zones such as Map Ta Phut are driving electricity demand in Thailand
BLCP’s debt package will also include an offshore commercial loan of $144 million under private political risk insurance, an onshore commercial loan of $40 million in foreign exchange, and an onshore commercial loan of $620 million in local currency.
The project is the first private power generation project in Thailand for which ADB is providing both a loan and political risk guarantee. The Japan Bank for International Cooperation (JBIC) is also involved in the financing, providing a loan to support the export of boilers, turbines and other equipment by MHI.
“With the required foreign exchange loans unavailable and limited capacity available for private political risk insurance for projects in the region, ADB’s assistance is crucial in supplementing private political risk insurance and catalysing offshore commercial loans,” said Joe Yamagata, ADB principal structured finance specialist.
The project represents the largest power project finance using foreign sourced financing in Asia in 2003, and in January 2004 its importance to the region was recognised when it was named by Asiamoney as ‘Project Finance Deal of the Year for 2003’. Baker & McKenzie acted as English and Thai legal advisors to both CLP Holdings and Banpu Public Company.
Development of Map Ta Phut involves the construction of two subcritical pulverized coal fired power units, each with an output of 717 MW. High quality bituminous coal will be used as the primary fuel while light fuel oil will be used for start-up, flame stabilization and during low load operation. Coal will be imported from Australia and Indonesia, with a maximum sulphur content of 0.7 per cent per cargo and 0.45 per cent annual average. It will be transported by sea to a coal unloading pier at the plant, which will have an active coal stock and reserve stockpile of 350 000 tons each, equivalent to 60 days’ coal supply. Light fuel oil will be trucked to the plant from the adjacent oil refineries and stored in two 2000 m3 tanks.
The plant will be equipped with two boilers and two steam turbines, all supplied by MHI. The boilers will have a forced circulation design, while the steam turbines will be three-cylinder condensing reheat units. Each turbine will be directly coupled to an enclosed generator with a water-cooled stator and hydrogen-cooled rotor.
The plant will also be equipped with a flue gas desulpherization plant for sulphur dioxide control, an electrostatic precipitator for particulate control, and a Mitsubishi Diasys Netmation instrumentation and control system. Other facilities to be constructed include a water treatment plant, a wastewater treatment plant, a fuel oil storage and handling plant, and administration and workshop buildings. Freshwater will be used to produce high quality water for the boilers, while seawater will be used for cooling.
The power produced will be fed to the plant’s 500 kV switchyard. EGAT will construct a 47 km double circuit overhead power line from the switchyard to the Pluak Daeng substation, which forms part of the national 500 kV grid.
Construction began in mid-2003 and is scheduled to take about three years. The commercial operation dates for units 1 and 2 are October 2006 and February 2007 respectively.