HoonSmart.com >>”Ban Phu Power” celebrates its 64th anniversary this year, and power plants in Japan, China and Vietnam are supplying commercial power. There is also a high opportunity to purchase a 600-900 MW gas power plant in the United States to generate immediate cash flow and launch three strategies to support the growth target of 5,300 MW by 2025.
Kirin Limpaphayom, chief executive of Banpu Power (BPP), said the company has good news to support growth in 2021, starting with a 20 MW capacity Yamagata solar power plant. The supply of electricity (COD) to commercial systems was planned last November 16th. And the 5MW Yabuki power plant is scheduled to start COD in December 2020, with no interruption in maintenance as it does annually in the fourth quarter of this year. Accelerating operation in two or three quarters, the existing power plant will follow its maximum capacity.
China’s Shanxi Lu Guang power plant 396 megawatt investment proportional capacity is expected to start selling steam from December, before COD begins in the first quarter of 20 years, and the newly acquired Mui Yin wind power plant in Vietnam begins. The 38-megawatt capacity will begin to recognize profits in the first quarter of 2021, and the 30-megawatt Vinhao Phase 1 wind power plant switched COD from the first quarter to May 2021. Impact of COVID-19 Transportation of construction equipment has been delayed. And a two-stage wind power plant with a capacity of 50 megawatts is first being investigated for feasibility of the project.
Kiron said the company continues to use its operational power plant takeover (M&A) strategy. To generate instant cash flow, we are currently negotiating the purchase of four US gas power plants with a capacity of 600 to 900 megawatts (MW) that are expected to finish in the first half of 2021, picking the remaining two.
At the same time, the company saw an opportunity to acquire wind and solar power plants in Vietnam. It is estimated that there will be at least 200 MW of power plant in Vietnam because it is a fast growing economy with direct wind power plant investment. Therefore, the demand for electricity is very high. And Vietnamese authorities supporting renewable energy power plants
It has a production capacity of 2,300 MW and is under construction for an additional 553 MW (total of 2,853 MW) for overseas power plant acquisitions and for its own investment company to grow to its target capacity of 5,300 MW by 2025. The company’s investment continues according to the following three strategies: 1. Domestic investment in Banpu Company (BANPU), the parent company, is currently investing in 11 countries including the United States, Indonesia, and China because investment bases and resources are already available. 2. Focus on investment in countries with high economic growth rates. In particular, in ASEAN, such as Vietnam and Indonesia, 3. focus on the growth of renewable energy business. With Banpu Next, which BPP has jointly invested in 50% each with BANPU, the goal of focusing on the use of energy technology will be about 800 MW of renewable energy or 20% of 5,300 MW.
Kiron said the company claims it has enough cash flow to invest. Alternatively, the power plant purchase usually has 200 million baht of cash per year, but the COVID-19 pandemic situation high instability therefore cash is prepared up to 50 million baht and must be returned to financial institutions. As before, if you want to go back to keep the 200 million baht of cash on hand and you still have the ability to owe a lot because the debt ratio is very low at 0.08 times and you have the opportunity to issue green bonds. It is important to choose a good property to invest in.
The CEO said that the company has also invested in workforce, has evolved to keep pace with change, and that trends in the global power market, for example, are shifting to the merchant market. Unlike long-term power purchase agreements (PPAs) such as Thailand, Indonesia, Malaysia and Vietnam three years ago, BPP started sending people to sell electricity in Japan’s secondary market with 140 MW of self-generated electricity. The cost of procurement for sale is not high because you don’t have to be a manufacturer to get more profit. Rather than just making PPA contracts with stable income, however, the company is still insisting on investing in power plants for risk management, and now most of the power plant ports are PPA contracts sold as long-term contracts to the Thai Power Producer (EGAT).
“Investors in BPP financial analysis should look at EBITDA as 30% of the project’s investments make up only a fraction of the profits. And our stock is selected for the MSCI Thailand Small Cap Index, which goes into effect on November 30, 2020, making it more attractive to domestic and international institutional investors,” Kiron said.