SPCG: to Take Another Breath

Concern over SPCG Public Company Limited (SPCG)’s future has risen since some of its power purchase agreements (PPAs) lasted less than 10 years and new projects have yet to  be announced. 

 

Light at the end of the tunnel is finally turned on…after SPCG announced that the company is set to invest in the solar farm project, which is used for the new city area of Eastern Economic Corridor Special Development Zone (EEC) with a production capacity of not less than 500 MW through SET Energy Co., Ltd. (SET Energy), which is a limited company jointly owned by SPCG (40%) and PEA ENCOM International Co., Ltd. (PEA ENCOM) (20%), set up by Provincial Electricity Authority (PEA).

 

SPGC also plans to acquire the entire business transfer of Mitsu which holds 40% shares in SET Energy…increasing the shareholding proportion of SPCG to 80%, adding installed capacity by 400MW.

 

Literally, SPCG is the first pioneering operator for solar farms in Thailand, but in the early days there were lots of difficulties as solar farms were new to people at that time, causing banks to feel less confident to offer a low mortgage interest rate.

 

As time went by, solar farms became popular…mortgage interest rates gradually declined…pushing SPCG to commit debt restructuring till the situation started to wind down. Therefore, SPCG expanded its solar energy investment overseas especially in Japan, but due to domestic problems, the project has been postponed.

 

Well…it was not that successful, hence the acquisition of additional 400MW would make SPGC to last longer.  

 

The aforementioned solar farm project is expected to start the construction by 2021, and complete the construction by the first quarter of 2022. Moreover, the farm is expected to have electricity production capacity, totally accounting for 300 MW in 2023 and considers to increase its production capacity up to 200 MW, to be completely constructed and ready to operate in 2026.

 

Regarding an investment value of not exceeding THB 23,000 million, the fund is expected to come from 1) loan, debentures issuing or capital increase 2) spin-off SET Energy to list on market or3) form an infrastructure fund. 

 

However, the approval of this solar farm investment has to wait until the Extraordinary General Meeting of Shareholders dated 15 January 2021.