SET-listed Electricity Generating Plc (Egco), Thailand's second-largest private power producer, has been in talks to acquire 90% of a wind turbine developer for about US$400 million.
The deal is expected to be concluded early next year. Located in Chaiyaphum, the wind project is slated for 200-megawatt capacity with operation to begin in 2014, said president Sahust Pratuknukul.
"The project is in the northeast of Thailand, which has potential for strong wind flows," he said.
Yesterday Egco announced a planned capital expenditure of about 10 billion baht next year for capacity expansion.
Most of the budget will be spent on renewable energies. The company has five projects under development with a combined capacity of 50 MW.
These projects are Solarco Solar Power Co, with a capacity of 28 MW, Theppana Wind Farm Co with 12 MW, Natural Energy Development Co (solar farm) with 3 MW, GIDEC Co (community wastes) with 3 MW, and G-Power Source solar farm at 4 MW.
All are scheduled to start operations between April and the end of next year.
"The planned capital expenditure excludes potential acquisitions of assets. We are approaching many project developers in this region, mostly power plants," he said.
In the third quarter, Egco reported a 126% increase of revenue year-on-year to 4.67 billion baht as net profit rose 35% to around 2 billion.
Mr Sahust said the company joined with LG Group, the South Korean industrial giant, to form a wood pellet producer (WPP) business to tap rising demand in developed countries. The project requires investment of 600 million baht.
WPP, which blends wood pellets with traditional coal for electricity generation, is seen as an emerging trend in developed countries to reduce coal consumption and carbon dioxide emissions in the power sector.
The project aims to use eucalyptus in Thailand as a raw material.
Egco also targets expansion overseas with a plan to double capacity of a coal-fired power plant at its wholly-owned Quezon Power in the Philippines to 1,000 MW. Egco acquired shares of the local operator there in May.
Shares of EGCO closed unchanged yesterday on the SET at 129 baht in trade worth 42.75 million baht.