EDL-Generation Public Company (EDL-GEN), a major operator of hydroelectric power plants in Lao PDR, plans to raise 6 billion-8 billion baht ($187 million-$250 million) this year to acquire 10 hydro power plants.
The fund will partly go toward buying 100 percent stakes of four hydro power plants from EDL, which have a combined generating capacity of 292 megawatts. The rest will be used to buy 10-60 percent stakes of five power plants as part of its strategy to boost the generating capacity from currently 881 megawatts to 2,300-2,400 MW by 2020.
“The demand for electricity in Lao PDR has continuously risen thanks to the policy to develop the country to be an industrial base to drive its economic growth. Plus, we plan to serve the greater demand from our neighboring countries like Thailand, Vietnam and China too,” said Boun-oum Syvanpheng, managing director & CEO of EDL-Gen.
The 10-year bond, to be offered via a private placement, is expected to carry a coupon rate at 200 basis points higher than the benchmark Thai government bond yield, said Adisorn Singhsacha, managing director of EDL-Gen financial advisor Twin Pine Consulting.
EDL-GEN has a staggering potential for growth thanks to stable revenue streams, low debt-to-equity ratio, strong domestic customer base and significant demand from overseas markets because the price of electricity from hydropower is lower than other power plants, he said.
“These factors make for a highly attractive investment proposition, which is why Twin Pine has invited EDL-GEN to raise new capital in the Thai market. EDL-GEN itself can expect to benefit from greater awareness among investors while the presence of another large private company seeking additional capital from Thailand would only add to the country’s potential as the regional capital hub,” he added.
EDL-GEN has obtained a credit rating from TRIS Rating and is fully complied guidelines from the Public Debt Management Office (PDMO).