Egat seeks more flexibility in securing overseas investments

Egat’s board director Kurujit Nakornthap said that the study was expected to be finished soon. The board had no plans to dissolve its Egat subsidiary and would continue to use it as an arm to make overseas investments, he said.

Earlier some Egat executives proposed that EGATi be dissolved given its lack of flexibility to make investments. However, Kurujit – who also serves as the Energy Ministry deputy permanent secretary – said the board believed the subsidiary could still operate as an investment arm, especially in government-to-government projects.

EGATi has lacked flexibility to make investments as it has to strictly comply with the state enterprise’s regulations. One rule requires that Egat first submit proposed investment projects for Cabinet approval, a process that can take time.

Kurijit said that he personally thought dissolving EGATi would be the board’s last option.

In the past four years EGATi has invested in only one project, Nam Ngiep 1 hydropower project in Laos, in which it owns 30 per cent. Japanese firm Kansai owns 45 per cent of the project and Lao Holding State Enterprise (LHSE) 25 per cent. The project, which cost Bt27 billion, has a production capacity of 289 MW and will start feeding power to the system in 2019. 

Egat governor Soonchai Kumnoonsate said that the state agency has yet to discuss dissolving EGATi with the board, though the board has already assigned its subsidiaries – including EGATi, Ratchaburi Electricity Generating Holding (Ratch), and Glow Energy and Electricity Generating (Egco) – to jointly discuss their positions as vehicles for investing overseas, especially in neighbouring countries.

Ratch chief operating officer Peerawat Pumthong said Egat wanted to see Ratch, Egco and the state agency consolidate their expertise in operations and maintenance, and form a new company that would explore Asean business opportunities in its areas of expertise. However, the proposed plan would need to be studied further in order to assess the advantages and disadvantages. 

A source at Egat said that executives had previously proposed that EGATi should be dissolved and Egat position its subsidiaries as overseas investment arms to generate more income for the state agency. Egat is one of the largest electricity enterprises in the region with high-quality products that are able to compete on overseas markets.