Thai firm in JV for solar farms in Saudi Arabia

Corporate October 04, 2013 00:00

By Watcharapong Thongrung
The Na

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A Thai company has won a joint-venture project to build solar farms in Saudi Arabia, in a move expected to help improve strained relations between the two kingdoms.

SPCG, a leading developer of solar-farm projects and a leader in the solar-energy business, has signed an agreement with Malasel Group of Saudi Arabia to set up a joint venture for engineering procurement and construction of solar farms in that country, SPCG chairperson Wandee Khunchornyakong said.
She said the Saudi government has a policy to buy 50,000 megawatts of electricity from solar farms over the next 15 years, to reduce the use of oil in generating electricity.
SPCG initially would invest about Bt100 million in the project, Wandee said.
“The Thai government places a lot of importance on this project. It is expected to help improve ties between Saudi Arabia and Thailand,” she said.
SPCG, a company listed on the Stock Exchange of Thailand, is a pioneer in solar-farm projects in Thailand. Its success won the confidence of Malasel, which invited the company to co-invest in the Saudi project, Wandee said.
She said the company’s new solar-farm projects would require an investment of about Bt24 billion. Of this, Bt18 billion would be borrowed from leading Thai commercial banks, such as Kasikorn, Bangkok Bank, Bank of Ayudhya and TMB, as well as International Finance Corporation. The projects will be implemented by the company on its own, as well as with business partners.
The projects were expected to generate revenue of about Bt4 billion to Bt5 billion a year, she said.
Wandee also said there was high demand for solar rooftop panels. She also asked the government to buy more electricity from solar-power makers to supply the country’s power grid.
Thailand has had estranged relations with Saudi Arabia for more than two decades. Diplomatic ties between the two countries have been strained since the “blue diamond” affair of 1989, when a Thai janitor working in the Riyadh palace of Prince Faisal stole close to 100 kilograms of jewellery, including a fabulous blue diamond.
In 1989 and 1990, the bilateral ties soured further when four Saudi diplomats were murdered in Bangkok, and with the disappearance in 1990 of Saudi citizen Mohammad al-Ruwaili, who lived in Thailand at the time.
Saudi Arabia banned all Thai labour and all tourism to Thailand by its citizens in 1990. However, medical tourists are permitted to travel to Thailand and Saudi Arabia also allows business visitors under strict conditions. Many Saudis circumvent the ban by applying for visas in and travelling to Thailand from a third country in the Middle East. About 80,000 Saudis visited Thailand last year.

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