SET-LISTED Banpu Plc. plans to expand renewable-power capacity to about 20 percent of expected generating capacity of 4,300 megawatts by 2025, chief executive Somrudee Chaimongkol said.
The company now has total generating capacity of 1,800 MW. Asean’s leading coal miner will spend about $5 billion in investment until 2025.
“Renewable power will have investment of $2 billion, while $3 billion will go to mainstream electricity generation such as gas-fired and coal-fired power plants,” Somrudee said.
Funding will come from project finance of 75 percent and equity of 25 percent.
Banpu is preparing to raise funds of 12.9 billion baht through a rights offering of shares and issuance of warrants.
Proceeds will be used to pay down debt, giving the company room to secure additional funding at a later stage for new growth, Somrudee said.
Banpu entered the renewable-energy business seriously last year as part of a strategy to alleviate the impact of the downturn of commodities, including coal.
It plans to expand its earnings before interest, depreciation and amortization from power from 30 percent to 40 percent of revenue.
Banpu has focused mainly on coal mining with huge reserves of millions of tons of coal in Indonesia, China and Australia. It is continuing to look for viable reserves overseas. It has operated and invested in coal-fired power in Thailand and Laos, and combined heat and power projects in China through its joint venture.
Apart from a plan to invest in solar power in Japan, Banpu sees opportunities in hydropower, biogas, wind farms and biomass in Thailand, China and Japan.
“Renewable power is a key business that the company will focus on, so our major task is looking at chances to invest or acquire assets to expand our power-business portfolio in the countries where potential is high,” Somrudee said.
Banpu plans to increase its generating capacity to 2,400 MW over the next five years (2016 to 2020) and in 2025 it will reach its target of 4,300 MW.
Under its five-year investment plan, this year it will spend $400 million on power business, including the Hongsa Lignite power project in Laos, solar power in Japan and coal power in China.
Expansion of coal mines in Indonesia requires $124 million.
Most of its investment this year will be for the Hongsa project in Laos.
Banpu expects to sell 46.1 million tons of coal this year, with 28.5 million tons coming from Indonesia, 13.6 tons from Australia and 4 million tons from China.
Last year the company had sales of 45.4 million tons of coal.
In 2016 the company expects the coal price to stand at $50 a ton, down from $55.52 last year.
Banpu shares closed on Friday on the Stock Exchange of Thailand at 16.80 baht, up 10 satang, in trade worth 73.82 billion.
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