KBank adviser to solar-farm developer
Kasikornbank has set up an investment banking division to focus more on fund-raising through financial instruments including infrastructure funds, the latest fund-mobilisation tool in the market.
KBank yesterday was appointed as the financial adviser to SPCG, Thailand’s biggest solar-farm developer, to launch the country’s first infrastructure fund, worth Bt5 billion. Krisada Lamsam, a senior executive vice president of KBank, said it had three or four deals in the pipeline to launch similar funds, expected to be introduced to the market in the fourth quarter of the year.
The bank has separated the investment-banking unit from corporate banking to provide financial advice to customers. Corporate banking will be in charge of lending to gain interest income, while investment banking will generate fee income, he said.
He said that even though private companies and state agencies could raise money at lower costs than with infrastructure funds, they were becoming an interesting choice because players were seeking new instruments for investment.
“Potentially, a state enterprise could raise money via an infrastructure fund as well, but it would have to prove that its projects have no legal barriers or political sanctions,” he said.
Fund managers, banks and the Stock Exchange of Thailand must jointly educate individual investors on infrastructure funds to encourage their use, Krisada said.
The Bt5-billion SPCG infrastructure fund will finance the investment for the ongoing 17th to 34th solar-farm projects, each of which requires Bt600 million to Bt700 million, said Wandee Khunchornyakong, managing director of SPCG.
SPCG has developed 34 projects with total capacity of 240 megawatts, costing a total of Bt24 billion. The first nine projects have been completed, while the 10th to 16th are the underlying projects that will be sold as the assets of the infrastructure fund. Those seven projects are under construction and will be completed this quarter. All 34 projects are scheduled to be completed by next year.
The next step is for SPCG to increase capacity of the 10th to 34th projects to 7.47MW from 6.12MW each to serve the country’s demand for electrical power. Outside the country, SPCG is in talks with Kyocera, a manufacturer of solar cells, to set up a joint-venture company to develop solar farms in Japan.
