Tomen Completed Formation of Investment Partnership in Union Power Development Company, for World's Largest Independent Power Producer (IPP) Project in Thailand; to include Hongkong Electric, Chubu Electric, Toyota Tsusho and Union Energy
2001-10-26
Tomen Corporation announced today that Hongkong Electric International Ltd. joined other major companies and invested 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.
Hongkong Electric International Ltd. is a wholly owned international investment arm of Hongkong Electric Holdings Ltd. The current shareholding structure of UPDC consists of Tomen Corp. (29%), Hongkong Electric International (26%), Chubu Electric (15%), Toyota Tsusho (15%), and Union Energy of Saha Union Group of Thailand (15%).
Tomen also announced that Chub Electric with Toshiba Corp. as consortium partner, and Maintenance Business Unit of the Electricity Generating Authority of Thailand (EGAT) have signed the master agreement on October 10, 2001 to cooperate with each other in the operation and maintenance of theUPDC's power facility.
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 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 electricitysales to EGAT.
Mr.Morihiko Tashiro, president of Tomen Corp. said, "Tomen is pleased to announce the completion to form the partnership for this project. Chubu Electric and Hongkong Electric bring commitment to and an outstanding record in building environmentally safe plants." He continued, "Coupled with Tomen's unwavering dedication to protect the regions natural resources and local culture, the project has the potential to make a significant contributionto the Thai economic recovery."
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 communicationwith 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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