It is a 50:50 joint venture between Glow Energy and Hemaraj Land and Development. It expects to spend US$450 million (Bt15.55 billion) to $500 million for the gas plant and $900 million to $1 billion for the coal plant.

Serge Eycken, vice president of Suez Energy Middle East-Asia for corporate and project finance, said the coal-fired power plant would be in Map Ta Phut in Rayong, because it had a port for transferring coal.

He said the company was not concerned about pollution emissions because its technology was top-class and in line with international standards.

"Almost every country has a coal-fired plant, even in Switzerland. It is difficult to avoid establishing coal power plants if the country stills need electricity at a moderate price," he said.

On the issue of pollution in Map Ta Phut, PTT and Siam Cement Group had to spend around Bt7 billion to install advance technology in their plants to reduce toxic emissions for their expansion projects.

Eycken said Glow did not have to invest in such equipment because it had equipped the power plants with the best technology since they were established.

If the company has to invest a huge amount of money for environmental development, the government should be fair by increasing the electricity price, he said.

"Not only companies but also all people in this country should shoulder this cost together," he added. Although Tris Rating assigned an "A" rating for Glow and the outlook has remained stable, it noted that Glow's business expansion in Map Ta Phut was expected to be limited by increasing competition from the PTT Group and by potential government action regarding environmental concerns in the area.

As one of the largest energy groups in Thailand, it is likely to be a successful bidder and is expected to receive an IPP licence in the coming IPP bidding. However, its synergies in the Map Ta Phut area may no longer be an advantage, Tris Rating reported.

The ratings reflect Glow's stable cash flow from long-term power-purchase agreements with the Electricity Generating Authority of Thailand and long-term contracts with a diverse group of industrial customers.

Moreover, it also receives strong support from its major shareholder, Suez Group, which is an international energy and environment service provider for its industrial customers.

Glow recorded revenues of Bt33.99 billion last year, up 18.9 per cent from 2005. Of the total, 87 per cent came from electricity sales and the rest from steam sales.

Chalida  Ekvitthayavechnukul

The Nation