CIMB targets big energy-sector lending boost
CIMB Thai Bank is in talks with two major power-plant operators for the facilitation of project financing, as it aims to boost its proportion of lending to the energy sector to 5-6 per cent this year, from 3 per cent currently.
President Subhak Siwaraksa yesterday said that energy, including renewable energy, was a low-risk business for the bank as power-plant investors sell their output to the state-run electricity authorities.
Moreover, demand for electricity is increasing in line with the growing economy, and the government is changing the power operating platform from traditional fuel sources to gas and renewable energy by using adders to attract private investors, he said.
CIMB Thai, in cooperation with the Energy Ministry, currently facilitates financing for many small power producers, and its outstanding lending to the energy sector stands at about Bt4 billion, out of overall loans of Bt120 billion.
The bank is negotiating with two major power producers, each with a project value of Bt3 billion-Bt4 billion, and hopes to become the financial adviser and lead arranger for the facilitation of loans for both projects.
CIMB Thai estimates that the provision of loans totalling Bt3 billion-Bt5 billion for these projects, and additional loans to small power producers, including renewable-power projects, will enable its energy portfolio this year to expand to 5-6 per cent of lending, he added.
Energy loans form s part of the bank’s corporate lending.
CIMB Thai this year also aims to boost loans from small and medium-sized enterprises, as well as retail loans, in to achieve a target of overall lending growth of more than 30 per cent, after recording 27-per-cent loan expansion last year.
Corporate loans account for 35 per cent of the lending portfolio, while SME loans contribute 25 per cent and the remainder is retail lending.
Meanwhile, CIMB Thai yesterday supported renewable energy via solar power by providing loans of Bt200 million to Maesareang Solar.
Maesareang Solar is developing a 3-megawatt solar farm in Mae Hong Son province with an investment value of Bt360 million.
The company is a subsidiary of Infinite Solar Group, which is owned by Thawatchai Thitisakdiskul, a former executive of Krungthai Card.
Thawatchai said the group would also be also developing two new solar farms, in Mae Hong Son and Lampang provinces, each with a capacity of 1MW. Each project will require an investment of Bt120 million.
He said the group had submitted applications to the Provincial Electricity Authority for the production of 24MW.
It plans to list on the Market for Alternative Investment, should it be awarded a 24MW power-purchase contract by the agency, he added.
