Ratch Group Plc has sold a 49% stake in Hin Kong Power Holding Co (HKH) to Gulf Energy Development Plc to form a joint investment for the 1,400-megawatt gas-fired power plant in Ratchaburi.
Both parties submitted letters to the Stock Exchange of Thailand on Friday. The deal is worth 1.96 million baht for 196,000 shares of HKH.
The power project has a renewal licence granted by the National Energy Policy Council in 2019 for the existing 700MW power plant. The concession expires in 2020.
Tri Energy Co, a Ratch subsidiary, is the operator of the 700MW power plant.
The new licence adds 700MW for a total of 1,400MW. The Electricity Generating Authority of Thailand will buy the electricity from the project under a 25-year power purchase agreement.
Ratch was the previous sole owner of HKH. The Hin Kong power plant has two power generators scheduled for commercial operation in 2024 and 2025.
The project is preparing an environmental impact assessment report.
Kijja Sripatthangkura, Ratch's chief executive, said the joint investment will fulfil the company's vision to support Thailand's power security and infrastructure system, as well as energy policy.
"Both companies have knowledge, expertise and experience as independent power producers," he said. "In addition, this joint venture creates a good opportunity for the two companies to strengthen communities and the environment around the power plant."
Ratch is also seeking a shipper licence for liquefied natural gas from the Energy Regulatory Commission to serve all gas-fired power plants in the future.
Yupapin Wangviwat, Gulf's executive director, said the joint investment will support the national energy policy and bolster Gulf's growth as it expands its power-generating capacity in Thailand.
Previously, Ratch and Gulf formed a consortium together with BTS Group Holdings Plc and Sino-Thai Engineering and Construction Plc that was selected as the winning bidder for operation and maintenance of two motorways: the 196km Bang Pa-in-Saraburi-Nakhon Ratchasima (33.3 billion baht) and the 96km Bang Yai-Kanchanaburi (27.8 billion), with a concession for 30 years.
Gulf expects to increase revenue from infrastructure projects to 20% of total revenue in 5-7 years.