The regulator will approve rules as early as this quarter for so-called "international infrastructure trusts" to finance the construction of power plants, toll ways and other public works, said Vorapol Socatiyanurak, secretary general of the Securities and Exchange Commission. Several Thai and foreign companies have expressed interest in offering infrastructure trusts, he said in an interview at his office in Bangkok today.
Thailand, Southeast Asia's second-largest economy, has been promoting itself to neighbours with less-developed capital markets as a place for raising funds. Army chief Prayuth Chan-ocha has said he will boost investments in projects along the nation's borders to increase trade. The three neighbours accounted for less than 4% of Thailand's international trade in 2013.
"Laos, Myanmar and Cambodia will require a vast amount of funds for the development of their infrastructure," Mr Vorapol said. The trusts help serve those needs and will be an "attractive" investment option, he said.
Laos raised 1.5 billion baht ($47 million) by selling sovereign bonds to Thai investors for the first time in May 2013. Companies such as Banpu Plc, Thailand's biggest coal miner, CK Power Plc and Ratchaburi Electricity Generating Holding Plc are building power plants in Laos that will supply electricity to Thailand. Gunkul Engineering Plc has power plant projects in Myanmar.
The new trusts will be backed by revenue from the infrastructure projects in those neighbouring countries. At least 70% of the total construction must have been completed for companies to get financing, said Mr Vorapol.
He expects state-controlled companies such as Airports of Thailand, Electricity Generating Authority of Thailand and Expressway Authority of Thailand to launch initial public offerings for infrastructure funds. He declined to provide a timeframe.