Thailand’s biggest coal company mulling US$170m Japan PV investment - reports


Thai coal mining company Banpu will invest up to US$170 million in Japan’s solar market, according to a report by news agency Reuters.

Voravudhi Linananda, chief executive of Banpu’s power production unit told reporters that the company is interested in seven separate Japanese solar projects with a combined generation capacity of 54MW. These would begin construction this year and come online in 2017, while Banpu is also eyeing projects in China and Indonesia, Reuters said.

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Considered Thailand’s biggest coal company, Banpu said it achieved a profit margin of 32% in 2015 for its coal despite a 15% average price decrease in selling prices for the year, due in part to an increased focus on cost reduction. The company is also placing greater emphasis on its power generation units which had a 38% profit margin last year.

Last month, Bangkok Post newspaper quoted former group CEO Chanin Vongkusolkit as having said that: “Coal-fired power plants present a more stable source of energy [than renewables] while keeping your electricity bills low.” However, Chanin’s successor, Somruedee Chaimongkol, who at the time of the Post article was CFO at Banpu said renewables facilities could be built more quickly and cheaply than coal.

In February Banpu rolled out a five-year plan for sustainable growth in the Asia-Pacific region, through which it aims to make renewable energy a 20% wedge of a total 4,300MW in operation by the end of 2025, from 1,800MW at present, measured by the company’s equity holdings in projects.

The announcement appears to mark continued interest in Japan’s solar market, which despite being in the process of tapering down its FiTs in anticipation of phasing out subsidies altogether by the early 2020s, is still attractive to overseas investors. This is partly due to the high number of projects registered for the first three years of the guaranteed buy-back scheme, which was introduced in 2012, when the tariffs were among the highest paid in the world.

In September last year, Thai investment bank Kasikornbank (KBank) agreed to help finance 10 Japanese solar PV plants, guaranteeing developer Premier Solution a JPY1.5 billion (US$12.4 million) loan offered by Tokyo Star Bank. Thailand’s Bangchak Petroleum also bought SunEdison’s Japanese PV plants for US$80 million in February this year.

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