Glow signs 660MW supply with Egat, launches Bt62.4-bn investment plan

Passing the environmental impact assessment in May, the Bt40-billion plant is one of four winners in the second-round independent power producer (IPP) contracts.

The 660MW IPP project in Map Ta Phut, together with Glow Energy's 382MW cogeneration expansion and expansion of a facility to sell steam equivalent to 115MW of electricity - both currently under construction, also in Map Ta Phut - will have total capital expenditure of around US$1.8 billion (Bt62.4 billion). This value-creating growth will increase Glow Group's production capacity by more than 50 per cent by the end of 2011.

"We will invest $220 million in the Gheco-One IPP project, the remainder coming from partners and project lenders. An additional $720 million of our own funds will be used in the steam and Phase-5 cogeneration expansions. All this funding comes from our operating cash flow and corporate funding and should not effect the usual dividend pay-out that the investors can normally expect from the company," said Suthiwong Kongsiri, chief financial officer of the Glow Group.

Peter Termote, CEO of the Glow Group, said: "This IPP expansion is part of a larger business expansion by Glow which will use over the period 2008-2011 more than $900 million of its own funds in three profitable expansions. This has indeed been a very successful period for Glow.

"Starting from 2010, Glow results will be substantially increased by new capacity and by the end of 2011, Glow will be a much bigger company than today, both in terms of size and earnings." Gheco-One's plant, which began construction preparation in July, is scheduled to start commercial operation in November 2011.

The project cost is estimated at $1.15 billion, around $800 million of which will be financed by project finance debt and the remaining equity will be shared 65 per cent by Glow Group and 35 per cent by Hemaraj Land and Development.

The plant is equipped with advanced emission-control systems and Glow will also invest in technology to reduce the emission levels from existing plants in Map Ta Phut. The Gheco-One plant will contribute around Bt100 million a year to supporting local community development.

Aside from the contract with Egat, Glow has signed contracts this year to supply up to 152MW of electricity and 378 tonnes of steam per hour to various large petrochemical customers.