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Infrastructure & PPPs in Thailand - Q1 2022 Update

YOG INFRA Q1 2022 insights

THAILAND has seen a lot of activity for economic and social infrastructure development starting 2022. Besides solar and transport projects, there are notable strides in energy transition through electric vehicles and battery development projects. New projects have been announced in waste-to-energy sector; and growing interest by local players for solar rooftop projects is evident.

Read more about key developments in Infrastructure and PPPs in the country in our latest insight.

 

January 2022

THAILAND APPROVES USD 440 MN PHUKET ROAD PPP

Thailand has approved the construction of a THB 14.6 Bn (USD 440 Mn) road on Phuket island in a public-private partnership (PPP).

The 4km Kathu-Patong elevated expressway will connect Patong Beach with Phuket’s east coast and carry a concession of 35 years.

Of the total cost, the government will spend THB 5.7 Bn to acquire the land. The concessionaire needs to bear the remaining expenditure of THB 8.9 Bn. It can recoup its investment from toll revenue, the government expects the new route will boost tourism in the area.


THAI ENERGY COMPANY BANGCHAK EXPANDS INTO PIPELINE SECTOR

Thai oil refiner and trader Bangchak Group has won the right to operate and manage a 99km fuel pipeline network from Bangkok to Bang Pa-in district for the supply of gasoline and diesel to customers including two local airports.

Bangchak will invest THB 1.6 Bn (USD 48 Mn) in the business, which will cover a 20-year period from 1 January 2022 and which marks the company's entry into the fuel pipeline transport and logistics sector.

The company will operate the fuel pipeline through new unit Bangkok Fuel Pipeline and Logistics (BFPL) and will look for further business opportunities in the sector in Thailand.


THAILAND'S GULF ENERGY ACQUIRES LOCAL WASTE-TO-ENERGY PROJECT

Bangkok-listed Gulf Energy Development has agreed to acquire a greenfield waste-to-energy project in Thailand's northern Chiang Mai province.

Gulf has purchased All Waste to Energy Company, a local enterprise which has been granted the rights by the provincial authority to procure municipal waste. All Waste's subsidiary, the Chiangmai Waste To Energy Company will receive at least 650 tonnes of waste daily and will have a generation capacity of at least 9.5 MW.

The company estimates the cost of the project to be THB 2.1 Bn (USD 63 Mn) and it is set to sign a power purchase agreement with the Provincial Electricity Authority in 2022. Construction will start soon after the contract and will last three years.


PTT SETS UP JV TO DEVELOP ELECTRIC VEHICLES AND BATTERY PRODUCTION IN THAILAND

PTT Public Company Limited (PTT), the state oil and gas company, and Global Power Synergy (GPSC), its power generation subsidiary, have formed a joint venture (JV) to support the development of electric vehicles (EV) and battery production in Thailand. The JV company named Nuovo Plus will undertake the feasibility of potential investment in battery production and sales.

The JV will also support the construction of an EV battery plant in Rayong and the deployment of charging infrastructure and digital platform in Thailand. The USD 1-2 Bn plant is expected to commence production of EVs by 2024 or 2025 with an annual capacity of 50,000. Currently, the plant produces G-Cell lithium-ion batteries for electric tuk-tuks, buses and motorcycles, with current annual capacity of 141 MWh.


THE GOVERNMENT OF THAILAND APPROVES WORKS ON THE KATHU-PATONG EXPRESSWAY

The Government of Thailand has approved plans to develop the 3.98 km Kathu-Patong expressway in Phuket. The toll road is expected to cost around THB 14.6 Bn and will be financed under investments through a public-private partnership (PPP) model. Of the total cost, THB 5.79 Bn has been allocated to settle land acquisition costs while the remaining will cover the cost of construction.

Between May and June 2022, the Expressway Authority of Thailand (EXAT) will invite bids from possible private partners, with the chosen bidder slated to begin construction in 2023 and open the route to traffic by July 2027.

The expressway will contain two lanes for automobiles and two lanes for motorbikes in each direction, as well as a 1.85 km tunnel.


BGPS FORMS JOINT VENTURE COMPANY FOR PRODUCTION AND SALE OF ELECTRICITY GENERATED FROM SOLAR ROOFTOP

B.Grimm Power Service Limited (BGPS), a 100% owned subsidiary of B.Grimm Power, has established a joint venture company with SCG Cleanergy Company Limited.

The new company would be called Cleanergy BGP Company Limited. The holding proportion would be 49% held by BGPS / 51% held by SCG Cleanergy.


February 2022

THAILAND SEEKS MARKET FEEDBACK TO PREPARE ORANGE LINE PPP

Thailand is seeking feedback from private investors to relaunch the delayed THB 122Bn (USD 3.8Bn) Orange Line public-private partnership in Bangkok.

The government-owned Mass Rapid Transit Authority (MRTA) has asked investors to submit opinions to draft the tender documents and concession contract.

Foreign investors will need to partner with a local company to bid for the project and the domestic firm will need to hold at least 51% of the JV.

The concessionaire will build the 13.4km western section of the Orange Line, connecting the Thailand Cultural Center and Bang Khun Non stations. The PPP also included the operation and maintenance of the entire 35.9km line for 30 years. The entire line is estimated to serve more than 430,000 passengers per day.

The project is set to attract strong interest from investors despite the hurdles it has faced so far, due to its large size and importance for the Thai capital subway system.


THAILAND'S CK POWER TO FUND RENEWABLE GROWTH THROUGH DEBT

Thai electricity producer CK Power plans to take on debt in the next three years to fund a plan to increase its renewable capacity by 2.8 GW.

The Bangkok-listed company will issue debentures and take loans from domestic financial institutions. The expansion plan will involve hydro, solar and wind power generation and the group has considerable room for debt financing without any need for an equity fundraiser.

Initially, most of the capacity growth will come from hydropower projects, while within five years it expects to have wind capacity of around 700 MW, and 330 MW of solar. In both wind and solar, the company's capacity is quite low at the moment, so it is a priority to boost that side of the business.

The company plans to increase its total portfolio to 4.8 GW by the end of 2024, which means that 95% of the company's total electricity generating capacity will come from renewable.


GULF ENERGY AND THAI CONGLOMERATE FORM SOLAR JV

Thai power company Gulf Energy Development and Thai conglomerate Charoen Pokphand Group (CPG) have set up a 50/50 solar joint venture called AG Korat.

AG Korat will develop and operate solar rooftop projects and utility-scale solar projects, targeting commercial and industrial customers in the Nakhon Ratchasima province of Thailand.

The new JV will start operations immediately. The partners hope to grow the new business to 50 MW over the next few years.


SHIZEN ENERGY AND CONSTANT ENERGY SIGNS PPA FOR 1,169 KWP SOLAR ROOFTOP OPERATION IN THAILAND

Shizen Energy Inc. (Shizen Energy) and Constant Energy concluded a long-term Power Purchase Agreement for a 1,169 kWp solar rooftop operation with Panasonic Energy.

Shizen Energy and Constant Energy have financed this operation with a THB 1.5 Bn (USD 50 Mn) project finance agreement with Thailand’s local bank, TMB Thanachart Bank PCL.

This solar rooftop project is located in Samut Prakan province will enable significant power cost reduction by using competitive renewable energy, and approximately 13,745 tons of carbon dioxide emissions are expected to be reduced during the 20-year contract.


THAILAND'S WHAUP PLANS 60 MW POWER EXPANSION IN 2022

Bangkok-listed WHA utilities & Power (WHAUP) is planning to add up to 60 MW of power capacity to its portfolio in 2022, mostly from solar projects.

The company is planning to invest THB 10 Bn (USD 307 Mn) in the power and utility segments over the next five years, including THB 2.7 Bn in 2022.


DOH PROPOSES THB 43.8 BN MOTORWAY PROJECTS IN THAILAND

The Department of Highways (DOH) plans to develop three motorway projects worth THB 43.8 Bn in Thailand. These include a 22 km extension of the Uttaraphimuk Elevated Highway. The project is estimated to cost around THB 27.8 Bn and will be funded under a public-private partnership (PPP) model. Works on the extension are scheduled to commence in 2023 and be completed in 2026, with the road expected to open to traffic in 2027.


THAILAND'S UAC GLOBAL PLANS BIOGAS AND EFW PORTFOLIO GROWTH

Thai energy trader and developer (Universal Adsorbents & Chemicals) UAC Global is looking to expand its energy-from-waste (EfW) and biogas power portfolio with an addition of up to 20 MW capacity in the next two years.

Bangkok-listed UAC, which owns and operates about 13 MW of biogas and solar power projects in Thailand, will develop renewable energy projects domestically as well as in the frontier markets

UAC also plans to bid for Thailand's community power plant (CPP) projects - bio mass and other waste-based energy projects to be developed for each community - in the second phase of CPP tenders, the tender is likely to be announced within 2022.


EEC POLICY COMMITTEE APPROVES COMPANY TO DEVELOP U-TAPAO AIRPORT IN THAILAND

The Eastern Economic Corridor (EEC) Policy Committee has approved the formation of a new company called EEC Airport Asset Development Company Limited to undertake the development of Thailand’s U-tapao airport. The newly formed company is owned by the EEC project and will have a capital of approximately THB 50 Mn.

The U-tapao International Airport will cover 1,000 hectares of land, and stretch between Rayong’s Ban Chang district to Sattahip district. The project is expected to be finished in 2023.


EGAT TO BUILD HYBRID HYDRO-SOLAR FACILITY AT THE UBOLRATANA DAM IN THAILAND

The Electricity Generating Authority of Thailand (Egat) has announced that it plans to build its second hybrid hydro-solar power plant on the reservoir of the Ubolratana Dam in Thailand. The hybrid facility will have a solar power generating capacity of 24 MW to feed into the hydro-power plant of the dam.

The solar system will be integrated with a battery energy storage system (BESS) so that the Ubolratana power plant can feed power to the grid system in a consistent and reliable manner.


TOTALENERGIES TO DELIVER 2.7 MWP SOLAR ROOFTOP FOR TOA IN THAILAND

TOA Paint has signed a binding, long-term agreement with TotalEnergies to provide a 2.7MWp solar PV (photovoltaic) rooftop and power 27% of the needs of TOA’s group factories with green power.

Under the agreement, TotalEnergies will install and operate the photovoltaic (PV) solar system while TOA will pay for the electricity generated for 15 years, without taking any upfront investments.

With around 5,022 modules installed, the PV system will generate around 3,970 Kilowatt-hours (KWh) of renewable electricity annually in total, and TOA will significantly increase cost savings and reduce carbon footprint, with an estimated total of 2,780 tons of CO2 emissions avoided annually.


MARCH 2022

THAI POWER DEVELOPER RATCH SEEKS HEALTHCARE OPPORTUNITIES

Bangkok-listed power developer Ratch Group is planning to spend up to THB 1 Bn (USD 29 Mn) in the healthcare sector in 2022.

It will look for investment opportunities jointly with local group Principal Healthcare.

The company will build a 59-bed hospital in Sakon Nakhon province. The facility, which is set to start commercial operations in February 2023, will cost an estimated THB 463 Mn.

Ratch will own a 25% stake in the hospital while Principal Healthcare will hold 70%. A local investor will have the balance. The joint venture is in discussions with Thai banks for project finance.


THAILAND APPROVES USD 32.5BN SMART CITY PPP

The Thai government has approved the tender of a 2,339 hectare smart city project in the Eastern Economic Corridor (EEC), a region consisting of three provinces that is being developed as a special economic zone.

The site, in Chonburi province, is adjacent to the U-Tapao Airport. Construction is scheduled for 2022-2032.

Private partners will invest approximately THB 1.1 Trn (USD 32.5 Bn) in developing the commercial areas. The project will be divided into five zones, including a financial hub, a medical area, and an education and research zone.


THAILAND HOLDS MARKET SOUNDING FOR CRUISE TERMINAL PPP

Thailand held a market sounding event for a THB 5.6 Bn (USD 167 Mn) cruise terminal project to be built in a public-private partnership (PPP). The project involves the construction of a facility on the island of Ko Samui, in the southern province of Surat Thani.

The terminal will be able to hold 3,600 travelers as well as simultaneously accommodate two cruise liners with a capacity of 4,000 and 2,000 passengers respectively.

The government will finance land acquisition and construction work, estimated to be THB 4.8 Bn, while the private partner will spend the balance to purchase and install equipment. The concessionaire will then operate and manage the installation for 30 years. The investor will recoup its investment through the collection of commercial and cruise revenue.


THAILAND TO AWARD U-TAPAO AIRPORT TECHNICAL FACILITY

Thailand plans to select an investor in 2022 to build an aviation technical zone in U-Tapao Airport, located within a special economic zone in the east.

The government-owned Eastern Economic Corridor (EEC) Office, which manages the industrial area, is developing a master plan for the project. The 86ha site will include two airplane maintenance, repair, overhaul (MRO) facilities and an aeronautical training centre.

The project is set to start operations in 2025.


CLEANTECH SOLAR COMMISSIONS 1 MW ROOFTOP SOLAR PV SYSTEM FOR SENIOR AEROSPACE IN THAILAND

Cleantech Solar has commissioned a 1 MW on-site rooftop solar PV system at the manufacturing facility of Senior Aerospace Thailand in Laem Chabang. The project provides solar power to Senior Aerospace under a long-term Power Purchase Agreement (PPA), signed between Senior Aerospace (Thailand) Ltd., a subsidiary of Senior plc and Cleantech Solar.

The solar power plant’s 1,296 PV modules are expected to generate over 18 GWh of clean electricity during the lifetime of the project, which will avoid over 10 kilotons of CO2 emissions, thereby helping the manufacturer to reduce energy costs and contribute to a sustainable environment. Cleantech Solar will now maintain and operate the PV system during the term of the agreement.


LOCAL LENDERS TO FINANCE 316 MW THAI SOLAR PORTFOLIO

Bangkok-listed renewables developer SPCG will use a syndicated loan from local banks to develop THB 14.3 Bn (USD 427 Mn) of solar assets along the country’s Eastern Economic Corridor.

Kasikornbank and Bank of Ayudhya are set to participate in the financing of the 316 MW portfolio. The project will have a debt-equity ratio of 75:25 and SPCG expects to tie up financing after the receipt of a construction permit. It aims to start building in the second half of 2022 and is targeting for the plants to start operations some time in 2023.

The company plans to develop more than 500 MW of solar capacity along the economic corridor, which the government is aiming to transform into a regional industrial and trade hub.


KAB INKS POWER PURCHASE AGREEMENTS WORTH 4,284 KWp IN THAILAND

Kejuruteraan Asastera Bhd (KAB) has signed five Rooftop Solar Power Generating System Construction and Power Purchase Agreements (PPAs) valued at RM 46.8Mn with a combined capacity of 4,284 kWp in Thailand.

Under the 25-year period PPA, KAB will build, install, manage, and maintain the grid-connected photovoltaic (GCPV) solar system for Siam Machinery and Equipment Company Limited and subsidiaries of Aapico Group of Companies (Aapico Ayutthaya).

The total savings expected due to the agreements will be approximately 135,433 MW for the entire project duration.

 

List of Transactions - Thailand Q1 2022


Source: Inframation, YOG INFRA analysis

 

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