Egat sticks to capex plan despite limits on borrowing
January 23, 2014 00:00
By WATCHARAPONG THONGRUNG
THE ELECTRICITY Generating Authority of Thailand will stay with its capital-expenditure plan despite the government's proposal to reduce its borrowings by Bt13 billion.
Egat governor Soonchai Kumnoonsate said yesterday that the government’s policy to curb public debt would not crimp his agency’s investment in power plants and transmission lines.
Egat will raise capital by launching an infrastructure fund this year with its North Bangkok co-generation plant, which is under construction, as the main asset. This will be the country’s first state-enterprise mutual fund.
Siam Commercial Bank was appointed the financial adviser in November.
The lower borrowing level of about Bt13 billion is in line with Egat’s proposal to the Finance Ministry.
The infrastructure fund is now pending the approval of the next Cabinet. It was originally scheduled to be offered 180 days after the engagement of the financial adviser.
The North Bangkok infrastructure fund is in line with the Finance Ministry’s search of new means of mobilising funds to support infrastructure development projects without adding to the public debt burden.
Egat will use its future cash-flow stream from the thermal power generated by the Northern Power Plant as assets to raise funds for new power plants and transmission systems to ensure adequate supply. Preliminarily, the infrastructure fund will be worth at least Bt10 billion with maturity of 10-25 years.
During the transition between the caretaker and next governments, Egat will expedite obtaining the Cabinet’s approval for the construction of the new 600-megawatt Mae Moh power plant, which will replace four to seven units of the old facility in Lampang. That plant is due to be decommissioned after 25 years of service.
This project is already with the caretaker Cabinet, but still needs the Election Commission’s approval.
Egat is now selecting contractors for the Bt28 billion Mae Moh power plant, which is expected be completed and commence operations in 2018.