Edison International affiliate seeks new financing for Thai coal plant
Gulf Power Generation Co (GPG), partly owned by the US energy firm Edison International, is trying to get its delayed Bor Nok coal-fired power project in southern Thailand off the ground, in spite of opposition by local residents concerned about its potential social and environmental impact. The US-Thai joint venture is now moving to arrange about $600 million financing to replace the previous borrowing plan that was outdated because of changing conditions.
Bangkok�Gulf Power Generation Co (GPG), partly owned by the US energy firm Edison International, is trying to get its delayed Bor Nok coal-fired power project in southern Thailand off the ground, in spite of opposition by local residents concerned about its potential social and environmental impact.
The US-Thai joint venture is now moving to arrange about $600 million financing to replace the previous borrowing plan that was outdated because of changing conditions. The company plans to commence negotiations with potential lenders towards the end of January or early February, targeting financial closing in the middle of 2001, said Sarath Ratanawadi, GPG managing director.
GPG, owned 60% by Bangkok-based Gulf Electric and 40% by Edison Mission Energy, an Edison International unit, now aims to begin construction of the 734 Mw facility in Prachuab Khiri Khan province "immediately" after the financial closing.
It will also seek a third extension to 2004 from 2003 for the contractual startup of electricity sales to the Electricity Generating Authority of Thailand (EGAT) under a long-term power purchase agreement. At the same time, the company will take steps to obtain various licenses required to build the power plant, Sarath said.
He suggested there is a trend toward greater acceptance from local villagers as the firm is trying to forge better understanding with them and other opponents about the benefits of the project.
"But it may be impossible to get everyone to agree," he conceded.
The cabinet approved the findings of a public hearing earlier this year on the condition a "joint committee" be established to foster local understanding of the project and resolve current conflicts. Opponents said the government is trying to head off confrontation by misleading people about Bor Nok, along with another other coal-fired power project, the 1,400 MW Hin Krut project of Union Power Development Co (UPDC), also in the province.
Both projects were strongly opposed by local residents and others who blocked the southern highway in December 1998 in protest. The government then decided to hold public hearings on the projects to end the riots.
Sarath regards an Oct. 10 resolution by the cabinet as signaling a green light for the project to proceed, while Union Power is not too sure because of vague wording of the cabinet statement.
GPG has already spent about 3.2 billion baht ($74.4 million) on the Bor Nok project, and the delays have cost it one billion baht in lost revenues, according to Sarath. He blames certain nongovernmental organizations for the delays, saying their members have refused to listen to reason and intentionally fostered conflicts and even violence instead of trying to conduct rational discussions.
Sarath reiterated the firm's offer to set up a fund to pay for any damage the Bor Nok project causes. The planned Bor Nok facility will use clean coal technology and will be fueled by sub-bituminous coal imported from Indonesia.
Jintana Kaewkao, head of Ban Krut Environmental Club, earlier warned protesters will continue their campaign against the two coal-fired power projects.
"The fight is far from over. The government is simply trying to buy time, he said."