The China-Asean Investment Cooperation Fund (CAF), a private equity fund focusing on infrastructure and energy investments, is making an entry into Thailand's booming power sector by acquiring 10% of National Power Supply Plc (NPS).
NPS, the main energy business under the Double A Power Group, marks the eighth investment of the fund and the second foray into Thailand, said Li Ruogu, chairman of both the Export-Import Bank of China (China Exim Bank) and the CAF.
Sponsored by China Exim Bank, the CAF has investments in Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Thailand and continues to pursue opportunities across Asean.
In July 2011, it completed an equity investment in Laem Chabang deep-sea port on the Eastern Seaboard.
"As Thailand's economy continues to grow, there is a pressing demand for increased power generation," said Mr Li.
"The CAF is confident that NPS is an excellent investment company, because it has a strong commitment to renewable energy, which is tightly aligned with our commitment to invest in sustainable development."
Apichai Sorpitiporn, a senior executive vice-president of NPS, said the CAF has committed itself to funding 10% of various alternative energy projects including construction of two biomass power plants in Prachin Buri's 304 Industrial Park.
However, he declined to reveal the exact amount of capital injection from CAF, saying the fund would support NPS's goal of tripling its capacity to 1,500 megawatts in five years.
"We believe this investment will also help to prepare Thailand's power business for the upcoming Asean Economic Community," said Mr Apichai.
NPS has eight power plants in operation, while construction of the two new ones will commence after an agreement is signed between NPS and the Electricity Generating Authority of Thailand.
The biomass plants will come online next year, while a 600-MW independent power producer project fuelled by clean coal is being planned for Chachoengsao province, said Mr Apichai.
NPS hopes to mobilise additional fund via a listing on the Stock Exchange of Thailand and is in the process of appointing a financial adviser, he added.
About the author
- Writer: Nareerat Wiriyapong
Position: Business Reporter