Thailand’s biggest private power producer Ratchaburi Electricity Generating Holding Plc (RATCH) has been given an opportunity by the global financial crisis to be more aggressive in acquiring stakes in overseas coal mines and electricity projects. Its targets will be mainly struggling companies in the region and it has been in talks with owners of coal mines in Sumatra and Java about buying substantial shareholdings, said managing director Noppol Milinthanggoon.
The company is also looking to enter the power business in Vietnam by either acquiring stakes in existing plants or investing in a new project there.
These moves are part of Ratchaburi’s strategy to diversify to other energy-related businesses across Southeast Asia over the next two years. ”The current economic meltdown has offered us the opportunity to explore coal mines now being sold. We are considering buying options along with potential new projects in Indonesia,” he said.
Ratchaburi plans to join with the Electricity Generating Authority of Thailand (Egat), holding a 45% stake in Ratchaburi, and other existing joint-venture partners including SK Engineering & Construction for expansion abroad. The South Korean firm holds 26% of Ratchaburi’s $830-million Xe Pien Xe nam Noi hydro-power project in Laos.
The Thai power producer has four more ongoing projects in the neighbouring country. ”Projects we are eyeing include Indonesia, Vietnam and possibly more in Laos to serve both their local markets and Thailand,” said Mr Noppol. Acquiring stakes of existing and planned independent power producer (IPP) and small power producer (SPP) projects would also be considered, he added.
Ratchaburi now has cash in hand of 8.4 billion baht (approximately 220 million USD) with retained earnings of 23.49 billion baht to finance its new investments. In addition, 7.5 billion baht worth of debentures have been approved to allow the possibility of raising further funds in the near future.
Meanwhile, Ratchaburi’s Hong Sa and Nam Ngum 3 power projects in Laos are likely to be delayed further as Egat is reviewing the country’s five-year power development plan (PDP) to more accurately reflect actual electricity consumption amid the economic slowdown.
The $3.9-billion Hong Sa thermal venture, in which Ratchaburi holds a 40% share, and the Num Ngum hydropower unit are set to start production in 2014. The ongoing projects will boost Ratchaburi’s total capacity from 4347 MW to 5364 MW in 2016.
