ITD part of $5bn Cambodia venture

Koh Kong plant will produce 1,830 MW

YUTHANA PRIWAN


SET-listed Italian-Thai Development Plc (ITD), Thailand's biggest construction company, is joining with five investment partners to develop a $5-billion coal-fired power plant in Cambodia.
President Premchai Karnasuta said ITD had signed a memorandum of understanding to invest in the power plant with Egco Plc, Ratchaburi Electricity Holding Plc, Datang International (Hong Kong) Ltd and Sino Thai Resources Development Plc.
Italian-Thai Power and Energy controls the largest stake of 30% in the joint venture, Koh Kong Power Light Ltd.
The SET-listed power companies Egco Group and Ratchaburi Electricity Generating Holding Plc hold 20% each. China's Datang owns 15%, while Egat International, a newly established and wholly owned overseas investment unit of the Electricity Generating Authority of Thailand, holds 8% and Sino Thai holds 7%.
Located in Laem Yai Saen in western Cambodia, Koh Kong Power Light is expected to come onstream by 2014 with an initial capacity of 1,830 megawatts. The utility is targeted to reach its maximum capacity of 3,660 MW several years later, Premchai said.
ABN Amro has conducted a financial feasibility study of the project, while Team Consulting Co provided environmental management studies. Datang International (Hong Kong) Ltd will be an equipment and engineering service provider. The company has discussed a long-term purchasing contract with a coal mine operator in Indonesia, he added.
Mr Premchai said that Koh Kong Power Light had been in discussions with the Thai government to supply power to Egat. It offered a cheaper price for electricity to Thailand than local coal-fired power plants and Laos's Hongsa Lignite in order to secure a power purchase contract with Egat.
''We want the new power plant to supply electricity to Egat, but it has yet to be included in the current Power Development Plan,'' Mr Premchai said.
''The project has not started construction. But once we secure the power contract with Egat, we could speed up the development to finish one year ahead of schedule.''
The Cambodian power plant is part of ITD's strategy to diversify into energy and mining to offset falling revenue from core construction activities over the past two years. It established wholly owned subsidiaries Italian-Thai Power and Energy Co and Sin Rae Muang Thai Co to support this strategy.
The two companies have sought business opportunities in Southeast Asian countries, India and Madagascar, he added.
ITD posted a consolidated net profit of 893 million baht in the nine months to September 2007, compared to a loss of 1.4 billion baht during the same period a year earlier, reflecting in part a change in accounting methods.
ITD shares closed yesterday on the Stock Exchange of Thailand at 7.25 baht, down 60 satang, in trade worth 196 million baht.