The European Investment Bank (EIB) is lending EUR 70 million to Bowin Power Company Ltd. to build a natural gas-fired combined -cycle heat and power plant within an industrial park 150 km southeast ofnear to Bangkok.
The new power plant will generate environmental benefits. The use of natural gas as the main fuel, combined with modern low-emission combustion technology will result in low environmental impact. The project will meet similar standards to those achieved by plants of this type operating within the EU. It will as well comply with all national and provincial environmental requirements.
The EIB loan will be mainly utilised to finance part of the construction of the 740 MW privately owned power plant. As an independent power producer, Bowin Power Company will supply electricity to the Electricity Generating Authority of Thailand (EGAT) to meet public demand. EGAT sells bulk power directly to distribution companies and a few large consumers. It can also exchange electricity with the national power companies of Malaysia and Laos. The new power plant is planned to start commercial operation in year 2002.
Bowin Power Company Ltd. is a special purpose company owned by H-Power Company Ltd.; which is a joint-venture company owned 50/50 by Hemaraj Land and Development Public Co. and the Tracteabel Group. Hemaraj is leading developer of industrial estates, power projects, utility centres, infrastructure and industrial services in Thailand. Tractebel is a Belgian leading industrial group mainly active in the fields of public utilities and engineering.
The commercialnon-political risk of the 15-year amortising EIB loan with option of fixed / floating interest rate will be guaranteed by a syndicate of some ten commercial banks, including European ones. Risks of currency non-transfer, expropriation, war and civil disturbance are covered by the European Union (EU) budget guarantee.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2007 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration.
The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America. In 1999, the EIB provided loans totalling some EUR 32 billion, of which EUR 4 billion for projects outside the EU. The Bank borrows on the capital markets the funds for its lending. Its bonds have regularly been rated "AAA" by the leading rating agencies. The EIB works on a non-profit basis and can pass on to project promoters the excellent conditions it obtains on the markets. The EIB may finance up to 50 percent of project cost. On average it provides one third of the funding and co-finances investments with other institutions.
1 EUR: 0.621700 GBP, 1.00460 USD, 38.5654 THB.