By Somluck Srimalee
Bangkok, January 16, 2018
With its initial success constructing the Bt150 billion Xayaburi Hydroelectric Power Project in Laos, CK Power Plc is negotiating with the Laos government to build another hydroelectric power projects worth over Bt150 billion. A final deal is expected to be signed by the middle of this year, the company’s managing director, Thanawat Trivisavet, says.
“The new hydroelectric project will have production capacity about 1,285MW, equal to that of the Xayaburi Hydroelectric Power Project, but the investment value will be higher than the Xayaburi project because of rising construction costs,” he said.
The company is also planning to invest Bt400 million to build solar power capacity of about 20MW in Thailand this year, he added. The company would also complete spending the initial investment of Bt1 billion for the Xayaburi project this year, followed by another Bt500 million in 2019 to bring it to completion by that October.
“Our investment budget will come from the company’s cash flow, and we will borrow from the commercial banks for our investment in this year and the next year. We may issue debentures debenture if the project needs more investment,” he said.
The company now has net interest-bearing debt per equity of 0.7:1 – leaving sufficient room to take out bank loans and issue a debenture if needed, he added.
Meanwhile, the company’s total revenue for 2018 will grow up to 15 per cent from 2017, which had grown 10 per from 2016, thanks to the company’s investment in cogeneration firm, Bangpa-in Cogeneration Co Ltd for phase two. The investment will generate income for the company for the entirety of this year after it started to operate in the last quarter of last year
Boosting net profit
When Xayaburi Hydroelectric Power Project starts to operate on October 1, 2019, it would further boost its net profit, reflecting its strong growth in capacity. Its current production capacity is 875MW, with 615MW coming from the Nam Ngum 2 hydroelectric power project, 238MW from Bangpa-in Cogeneration phases 1 and 2, and 22 MW from the solar power plant. That will rise to 2,160MW with the addition of the Xayaburi project at 1,285MW.
CK Power Plc holds a 30 per cent stake in Xayaburi Power Co Ltd, with 25 per cent held by Natee Synergy Co Ltd, 20 per cent by Electricite du Laos, 12.5 per cent by Electricity Generation Co Ltd, 7.5 per cent by Bangkok Expressway and Metro Plc, and the remaining 5 per cent by PT Sole Co Ltd.
The Xayaburi project also has an agreement to sell electricity to the Electricity Generating Authority of Thailand (EGAT) for up to 95 per cent of its production capacity at a price of around Bt2.10 per unit, with the next five per cent guaranteed to Electricite du Laos at the same price.
“Xayaburi will start to test run at the end of this year and will starts to full operation on October 1, 2019,” said Thanawat.
“The project has a concession agreement starting from [that date] until October 1, 2050. The project has an internal rate of return, or IRR, up to 12 per cent. This will generate strong income for the company for the long-term.”