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Mr. Soonchai Kumnoonsate, Governor of Electricity Generating Authority of Thailand (EGAT), has revealed that it is the government’s policy that encourages suitable state-owned enterprises to seek alternative fundraising instrument as the new source of capital to develop the national infrastructure. EGAT, as the largest power generator in the country, seeks to raise fund via North Bangkok Power Plant Block 1 Infrastructure Fund, Electricity Generating Authority of Thailand (“EGATIF”, or the “Fund”), which will be Thailand’s first infrastructure fund that invest in the right to availability payments of the power plant that is operated and owned by a state-owned enterprise. Furthermore, EGATIF provides an opportunity to the public, especially retail investors, to participate in the development of national electricity system and to promote sustainable electricity supply.

EGATIF will be directly sponsored by EGAT, Thailand’s most experienced and proficient state-owned enterprise in the area of electricity generation, power plant operations and maintenance. Moreover, EGAT has the most power generating capacity in the country with its own operation and maintenance teams to service its own power plants and provides such services to private power producers.

EGAT has appointed The Siam Commercial Bank Public Company Limited (“SCB”) as the Financial Advisor and Sole Lead Underwriter for its fundraising via EGATIF, and Krung Thai Asset Management Public Company Limited (“KTAM”) as the Fund Manager. The Fund will invest the right to availability payment of North Bangkok Power Plant Block 1 (the “Plant”) for 20 years period. The establishment of the Fund will allow EGAT to utilize the fundraising proceed to invest in electricity infrastructure assets to cater for the continuously increasing domestic electricity demand, which will lessen the investment burden of the public sector.

EGATIF will invest in the right to availability payment of the North Bangkok Power Plant Block 1, one of EGAT’s latest combined-cycle power plants, with a contracted power generation capacity of 670 MW that employs combined-cycle production technology, which utilizes both natural gas and steam as the fuel for power production. Such technology is the most advanced technology in Thailand and is internationally recognized. Furthermore, the Plant is located in the area with high electricity demand, implying its priority to be the selected power plant to generate electricity into the transmission system, as such location minimize the loss rate of electricity power that would otherwise be lost along the transmission lines, which provides prospect for the Plant to operate at full capacity.

Additionally, EGAT will invest 25% in the fund for at least 5 years period, and the remaining 75% will be offered to institutional and general investors for subscription. EGAT’s investment in the Fund will enhance the investors’ confidence that the Fund will be investing in EGAT’s most efficient power plant.

Mr. Arthid Nanthawithaya, SCB’s Chief Executive Officer and Deputy Chairman of the Executive Committee, as the Financial Advisor and Sole Lead Underwriter, stated that EGATIF is the first infrastructure fund to be sponsored by state-owned enterprise, which the Fund will invest in the right to availability payment of North Bangkok Power Plant Block 1 as per the investment agreement for 20 years period. The Plant employs a combined-cycle technology, which is an internationally recognized technology. Furthermore, EGAT will absorb all operating and maintenance expenses of the Plant in addition to EGAT’s expertise in power plant operation and maintenance business that provides strong assurance to the availability of the Plant from an effective operation and maintenance throughout 20 years investment period. Moreover, EGATIF will be the largest electricity infrastructure fund to be listed in the Stock Exchange of Thailand (SET) at present. The aforementioned highlights provide EGATIF with clear revenue structure with steady income and low volatility that is close to bond.

With regards to the Fund’s set-up process, SCB and KTAM had submitted the draft prospectus to the Office of the Securities and Exchange Commission (the “SEC”), and is currently under review for approval. Once the prospectus becomes effective, the Fund’s investment units will be offered to the public for subscription whereby the subscription period is anticipated to be at the end of June. The allocation of units for retail investors is based on “Small-Lot-First” basis, which provides the opportunity for all retail investors, who are interested to subscribe for the units, to participate in the investment for the development of national electricity system and to promote sustainable electricity supply.

Mrs. Chavinda Hanratanakool, KTAM’s Chief Executive Officer, stated that EGATIF has a clear revenue structure with steady income in which the right to availability payment that the Fund received will depend solely on the availability of the North Bangkok Power Plant Block 1 to dispatch electricity and does not depend on the actual electricity consumption, demand or tariffs. Furthermore, EGATIF is covered by 4 different insurance policies to protect the Plant against any risks that may occur, in the case that the Plant got damage and have an impact on the availability payment. For example, a Business Interruption Insurance to provide coverage in the event that the Plant is damaged and lose its availability in which EGAT will receive claims from insurer whereby EGAT will transfer such claims to the Fund. Additionally, EGATIF has a dividend payout policy of at least 90% of its adjusted net profit and will distribute dividends at least twice a year.