Tomen to Build the World's Largest Independent Power Producer (IPP) Project in Thailand; Chubu Electric Co. and Toyota Tsusho Become Investment Partners
2001-08-16
Tomen Corp. announced today that Chubu Electric Power Co., Inc. and Toyota Tsusho Corp. will invest in Union Power Development Co., Ltd. (UPDC), Tomen's IPP project company to build and operate the world's largest independent power producer plant, a 1,400 megawatt coal-fired plant in Thailand. The new partnership of the UPDC consists of Tomen Corp. (34%), Chubu Electric (15%), Toyota Tsusho (15%), Saha Union Group of Thailand and other investors (36%).
In April 2002, UPDC plans to begin construction of the IPP project in the Hin Krut district of Prachuap Khiri Khan Province, 380 kilometers southwest of Bangkok, which will start operation in October 2005. UPDC obtained a 25-year power purchase agreement from the Electricity Generating Authority of Thailand (EGAT). The total project cost will be approximately US$1.3 billion, including US$300 million of the investment capital and US$1 billion of project financing loans by Japan's and Thailand's financial institutions based on the project revenue from electricity sales to EGAT. Tomen invests US$104 million (12.7 billion yen) which is 34% of the total investment capital. | |  |
Tomen and Toyota Tsusho plan to establish a new company that will annually supply four million tons of high quality low-sulfur coal mainly from Australia including Oakbridge Ltd., in which Tomen holds equity. Chubu Electric will operate and maintain the plant with Toshiba Corp. The consortium of Toshiba Corp. and Toshiba Plant Construction will build the plant, while the NYK Line will transport coal to the plant.
Mr.Morihiko Tashiro, president of Tomen Corp. said, "Tomen is pleased to have been selected to build a project of this magnitude, one that will aid in the Thai economic recovery. Chubu Electric brings commitment to and expertise in building environmentally safe plants and made its name as one of Japan's largest operator of coal-fired plants." He continued, "Our ability to utilize a variety of partners in our network will enable us to create the most efficient and cost-effective project."
Illustration of the Hin Krut power plant |
In October 2000, the government of Thailand approved the construction of the project after its economic recovery. More than twenty thousand local residents signed a letter of support to the project. This approval resulted from UPDC's steady effort to promote communication with the local residents, and to ensure protection of the local environment. UPDC plans to spend 16.8 billion yen equivalent to 17% of the construction amount for the environmental protection. The protection measures include air quality control systems such as NOx reduction, removal of SO2 and particulates, which aim 10% below Thailand government's requirements. The mitigation measures for protection of seawater quality, coral and marine ecosystems are also implemented.
On May 17, 2001 EGAT agreed to revise its power purchase agreement with UPDC to compensate for cost incurred in project delays and environment protection work. On June 8, 2001 UPDC obtained the necessary permits for constructing the plant from local government.
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