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Ratch assigns B25bn for 2018 investment

Ratch's Hongsa coal-fired plant in Laos. The company hopes to finalise two acquisition deals in Asean and Australia during this half.

SET-listed Ratchaburi Electricity Generating Holding Plc (Ratch), the country's largest private power generator, has announced the allocation of a capital investment budget totalling 25 billion baht for this year to expand capacity by 12%.

Chief executive Kijja Sripatthangkura said the budget will go not only to power plant development, but also related business such as the Yellow and Pink mass transit lines in the Bangkok metro area, liquefied natural gas (LNG) facilities and coal mining.

"We aim to expand business both through new development and merger and acquisition (M&A) assets," Mr Kijja said. "We estimate capacity expansion to 8,250 megawatts by the end of this year, up from 7,380MW at the end of last year."

Of the total budget for 2018, 10 billion baht is for M&A of productive power generation assets. The move is aimed at speedier expansion than relying on new development.

Ratch is talking with several local businesses that operate plants based on fossil-based power and renewables, and it also expects to finalise two acquisition deals in the first half of this year.

The two deals would bring a combined capacity of 370MW in Asean and Australia. Mr Kijja declined to disclose further details of the deals.

The remaining 15 billion baht is for project development, including the Mount Emerald wind power farm in Australia, which is under construction and scheduled to start operations in September.

Also in Australia, Ratch has a development licence for the Collinsville solar power farm of 34MW to begin operating in July.

Ratch furthermore plans to increase the development budget for the Fangchenggang nuclear power plant in China, a project in which it holds a 10% stake.

The project already includes two operational units of power generation; plans call for developing a further three to six units over the next several years.

"Ratch expects knowledge and technical learning from the nuclear power plant in China to be applied to future nuclear power in Thailand, as Thai energy policymakers have set to build the first nuclear power plant in the next decade," Mr Kijja said.

Moreover, Ratch holds a 10% stake in the Yellow and Pink lines that are scheduled to start development this month and begin operating in the fourth quarter of 2020.

The project's combined budget is 100 billion baht, led by Bangkok Mass Transit System Co and Sino-Thai Engineering and Construction Plc.

Ratch estimates that the two lines will use 191MW of electricity over the 25-year concession from 2020.

For LNG facilities, Ratch is talking with PTT Plc about a feasibility study and preliminary design.

Last year, Ratch reported a revenue decline of 9% to 46.438 billion baht, due to several power generation units being shut down for repair and maintenance.

Net profit fell by 1% to 6.107 billion baht as expenses rose by 12%.

RATCH shares closed yesterday on the Stock Exchange of Thailand at 54 baht, down 25 satang, in trade worth 61.7 million baht.

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