Press Release
Hongkong Electric Holdings Limited (HEH) announced today (27 February 2004) that its wholly-owned subsidiary, Hongkong Electric International Limited (HEI), has finalised shareholding arrangements with five other shareholders for a 1,400 megawatt (MW) gas-fired power plant project in Thailand after a major restructuring of the project.
The plant, which will come into operation in 2008, will be one of the largest base-load low-cost generators in Thailand, with a scale equivalent to 6% of the country's projected installed capacity.
Following the signing of the shareholder agreement today, HEI will become the largest foreign shareholder in the joint venture company. It will have a 25% stake in the HK$6.87 billion project.
Other foreign investors are Chubu Electric and Toyota Tsusho which will take up 15% and 10% respectively.
The largest local shareholder, also with a 25% interest, will be Thailand's Ratchaburi Electricity Generating Holding Company Limited which is the largest independent power producer listed in the stock exchange of Thailand. PTT Plc, the largest petroleum company and gas supplier, will have a 15% share of the project. The remaining 10% will go to Thailand's Saha Union Group.
The consortium will develop the 1,400 MW gas-fired power plant in Ratchaburi Province, which is 100 km southwest of Bangkok, and to sell 100% of its electricity output to the state-owned Electricity Generating Authority of Thailand. An effective 25-year take-or-pay Power Purchase Agreement offers a secured return and has a cost-matching tariff structure indexed to the US dollar.
Group Managing Director of HEH, Mr Tso Kai-sum, said the project would be Hongkong Electric's first power generation investment outside Hong Kong. Currently, its overseas power business focuses on distribution networks in Australia.
"Hongkong Electric is very pleased to be a lead investor in this important project. With strong local partners, sound project fundamentals and favourable growth forecasts for the Thai economy and its electricity demand, we are confident that it will provide a strong platform from which to further invest in the power industry in Thailand and in the region," said Mr Tso.
Being an expansion of the Ratchaburi Power Station, the new plant will be built on land inside the existing complex which already has 3,645 MW installed generating facilities. The utilisation of common facilities will help reduce upfront capital requirements.
Construction of the plant will begin in 2006, with the first 700 MW unit scheduled for commissioning in March 2008 and the second unit in June 2008.
Mr Tso added that HEI would play an active management role in the project while Associated Technical Services Limited, also wholly owned by HEH, will be responsible for the project's construction management.
About Hongkong Electric Holdings
Hongkong Electric Holdings Ltd. (HEH) is the listed vehicle of the Hongkong Electric Group of companies which includes The Hongkong Electric Company, Limited (HEC), Hongkong Electric International Limited (HEI) and other subsidiaries. HEC is an electricity utility established in 1889 and its principal activity is to generate and supply electricity to Hong Kong Island and Lamma Island. HEI is the international investment arm of HEH, pursuing investment opportunities outside Hong Kong.
