The board of the Electricity Generating Authority of Thailand (Egat) yesterday approved a budget of Bt33 billion for investment this year, with Bt14 billion to come from borrowing and the rest from cash flow.

"We're looking for funds with the lowest cost," said Egat governor Kraisri Karnasutra.

He said Egat's planned bond issue this year would not be affected by the 30-per-cent capital-reserve requirement, because all the bonds would be denominated in baht.

Of the investment budget, Bt17.7 billion will go to expansion of Egat's transmission grid and the rest to increasing capacity at its power plants. The grid expansion, which was also approved by the board yesterday, will be completed over the next five years.

"The project study will be conducted this year with the Bt17.7-billion budget, while the construction work will start next year," said Kraisri.

The grid expansion, to support growing power demand in rural areas, will cover all regions of Thailand except the North.

Power consumption is expected to reach 22,718 megawatts this year, or 1,654MW more than last year, based on the forecast of 5-per-cent economic growth.

Egat expects Bt300 billion in revenue and Bt20 billion in net profit this year. It has set aside Bt100 million to promote energy-saving campaigns.

Kraisri said net profit could be higher if fuel costs drop. Egat expects natural gas to account for 67.4 per cent of all electricity generation this year and coal 12 per cent. No diesel will be used.

With the increased use of natural gas and coal, Egat expects generating costs to drop between next month and May. That would allow a reduction in the fuel-tariff (ft) rate, resulting in lower power prices.

Egat deputy governor Ratanapong Chongdamkerng said the average ft rate this year should be similar to last year. Though the rate could drop over the next four months, it could pick up later when natural-gas prices escalate, he said.