Banpu eyes large revenue from Hongsa power plant
Banpu eyes large revenue from Hongsa power plant
Banpu, one of the largest mining and power companies in Thailand, is expecting a significant increase in earnings when the Hongsa lignite fired power plant in Xayaboury province becomes operational in 2015.
Banpu holds a 40 percent stake in the US$3.7 billion power plant, which is currently under construction.
“In 2015, when the Hongsa power plant starts operating commercially, the electricity it generates will contribute 30 percent of our earnings,” the company's Chief Executive Officer Mr Chanin Vongkusolkit said as quoted in Thailand's The Nation this week.
“This is based on the assumption that no new power plant is acquired before then. Looking forward to the next five years, the ratio could rise above 30 percent but not exceed 40 percent, as we still see a lot of opportunities from the mining business.”
Mr Chanin said Banpu has high hopes for energy development, centred on the 1,800MW Hongsa power plant, which will increase Banpu's installed capacity by 715MW in 2015.
According to The Nation, under a 25-year power-purchase agreement, Hongsa Power will sell 1,500MW to the Electricity Generating Authority of Thailand for Bt2.275 per kilowatt-hour and 100MW to Electricite du Laos for 6 US cents (Bt1.78) per kilowatt-hour.
While Ratch, another shareholder, takes charge of the engineering side, Banpu has devoted all of its knowledge and experience in planning and operations accumulated in the past years to the project.
The price of lignite - sourced in nearby pits - to fire the power plant is fixed throughout the 25 years. The US$3.71-billion (Bt110 billion) project is funded 50:50 by baht- and dollar-denominated loans. Power is also priced in baht and dollars at the 50:50 ratio, to avoid foreign-exchange risks.
Another shareholder in the mega development project is the Lao Holding State Enterprise, a state-owned Lao entity.
Mr Chanin acknowledged that there were many risks involved with such a large power plant. Located in Hongsa district, the plant needs a better road for the transport of equipment from Nan province in Thailand.
The resettlement scheme for more than 400 households was completed last year, but programmes to create jobs and control pollutants are under way, he said.
According to a report provided to officials at the Lao Ministry of Energy and Mines, construction of the Hongsa power plant is now 50 percent complete, 1 percent ahead of the original plan, and is on track for full completion and commercial operation in 2015.
vientiane times
