Thai Solar eyes funding options as it aims to add 100MW to total capacity
Thai Solar Energy (TSE), a very small power producer (VSPP) founded by the Maleenont family, expects it will need more than Bt8 billion to add 100 megawatts to the total capacity of its solar power projects, from the total of 80MW expected to come online by midyear.
Founded in 2008, TSE currently develops only 5MW at its solar thermal plant in Kanchanaburi province, though it is licensed by the Energy Ministry to produce up to 135MW. The licence terms are 25 years.
Chief operating officer Cathleen Maleenont said the company had switched to photovoltaic technology for its new solar plants because of their lower cost. Under the new PV technology, TSE has set up Siam Solar Energy 1 Co (SSE1) to develop 10 power projects with a total production capacity of 80MW.
The total investment for this is Bt7 billion, and Bangkok Bank has granted a credit line of Bt5.4 billion to support it. The bank and TSE yesterday signed the financing agreement.
She said the first 40MW would be supplied to the Provincial Electricity Authority in April and the remaining 40MW would come online in June. The output of 80MW will generate revenue of Bt1 billion a year, which TSE will realise fully next year.
The company expects to break even within four or five years. However, the revenue contribution from its solar farms will gradually decline after 10-15 years. The company needs to develop new projects to sustain revenue, she said.
Cathleen said TSE planned to add 100MW to its total capacity, and when the ministry opens tenders for new licences, the company is ready to join the bidding. However, the company also aims to acquire existing licences from enterprises that are not using them to develop solar farms.
With a debt-to-equity ratio of 3:1, acquiring the licences might boost costs, so TSE has to prepare options for financial restructuring.
Adding 100MW to total capacity will require a budget of no less than Bt8 billion, hence TSE has to increase its capital from Bt1.36 billion to Bt2 billion. Apart from securing lending from Bangkok Bank, TSE plans to raise funds through the capital market, floating an initial public offering and establishing an infrastructure fund.
TSE will appoint a financial adviser over the next few months to study the feasibility of listing on the Stock Exchange of Thailand by the end of this year. After listing, however, the Maleenont family will remain the majority shareholder with no less than 51 per cent.
PM Energy, which is wholly owned by the Maleenont family, currently holds 53 per cent of TSE, while Wave Entertainment holds 25 per cent. Wave Entertainment is controlled by the Maleenont family and BEC World.
Prapharat Tangkawattana, group chief financial officer of TSE, said the company was also interesting in developing biomass power projects because renewable energy is a sunrise industry in Thailand.
Based in Kanchanaburi, the company also sees business opportunity from the Dawei project in nearby Myanmar.
Pracha Maleenont, a founder TSE, owns around 500-600 rai (80-96 hectares) in Kanchanaburi and Suphan Buri, where construction of the planned Dawei-Kanchanaburi highway could support real-estate projects including warehouses and retail businesses for the group apart from renewable energy, Prapharat said.