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Thai Corporate Day Thai Corporate Day March March 6, , 2003 2003

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Page 1: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Thai Corporate DayThai Corporate DayMarch March 66, , 20032003

Page 2: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

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����������������� ������������������������ ������������ ��������

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������ ����������������������������������� ������������ ��������������

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� �������������������������!���������������� �� ���" ������������

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Page 3: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

AgendaAgendaAgendaAgenda

�� RATCH OverviewRATCH Overview

�� Power IndustryPower Industry�� Power IndustryPower Industry

�� Benefits of Interest ReductionBenefits of Interest Reduction�� Benefits of Interest ReductionBenefits of Interest Reduction

�� Investment Consideration Investment Consideration

�� Operating PerformanceOperating Performance

�� Awards in Awards in 20022002

�� AppendixAppendix�� AppendixAppendix

Page 4: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCH OverviewRATCH OverviewRATCH OverviewRATCH Overview

Page 5: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

The CompanyThe CompanyOwnership StructureOwnership Structure 5Ownership StructureOwnership Structure

• RATCH has been set up as a holding EGAT45% Public 34.05%• RATCH has been set up as a holding company with the primary objective of seeking investments in attractive power generating assets in order to

EGAT

EGAT Provident Fund GSB*

45% Public 34.05%

Banpu Grouppower generating assets in order to enhance shareholders’ value.

• Ratchaburi Electricity Generating

14.99%

Fund

3.34% 2.62%

• Ratchaburi Electricity Generating Company Limited (“RATCHGEN”) is a project company which will acquire Ratchaburi power plant from EGAT.

RATCH

100%Ratchaburi power plant from EGAT.

• RATCHGEN’s main objective is to operate the power plant to maximize

RATCHGEN

100%

operate the power plant to maximize its full potential.

• EGAT will hold a significant stake in • EGAT will hold a significant stake in RATCH.�

*GSB = Government Saving Bank*GSB = Government Saving Bank

Page 6: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

The CompanyThe CompanyTop Ten Largest ShareholdersTop Ten Largest Shareholders 6Top Ten Largest ShareholdersTop Ten Largest Shareholders

The Company’s top ten largest shareholders as at April 2,2002.The Company’s top ten largest shareholders as at April 2,2002.

��� �� #

� �������������� ����������������� � ����������������������������� �������������� ����������������� � ����������������������������

� � ��������������� �����

������!�����"#����$�����%��� � �

� ��$��� ����& $���� �' ��(�� ��$��� ����& $���� �' ��(�

�� &� ���&������� �'� ������#��)�!� � ���(�

( *��� ��&� ���� ���)��+����� ��� ��,��� ��-��( *��� ��&� ���� ���)��+����� ��� ��,��� ��-��

. /&�)�0&�� ����1�2�!���#�����,���� ��((�

- ��$��� �������#���%��� ��..�

� 3$��#� 4)���#��� �'�2�!���#�����,�5 �� .�� 3$��#� 4)���#��� �'�2�!���#�����,�5 �� .�

�� &)��&������#�)3�,��� �� �

Source: Thailand Securities Deposition Company Limited

Page 7: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCHGEN PROJECTRATCHGEN PROJECT7

RATCHGEN PROJECTRATCHGEN PROJECT

Generating Capacity Comparison of RATCHGEN and Country’sGenerating Capacity Comparison of RATCHGEN and Country’sGenerating Capacity Comparison of RATCHGEN and Country’sGenerating Capacity Comparison of RATCHGEN and Country’s

Capacity (MW)

����������� ������������

����������� ������

������

������

������ 12.38%14.61 %

��� ����������

������

������������� 7.17 %

12.38%

Electricity GeneratingElectricity Generating CapacityCapacity 33,,645 645 MW. MW.

• TH Unit 1 735 MW.

Oct-00 Apr-02 Nov-02

Transferring of TH & CC Power Plants Transferring of TH & CC Power Plants • TH Unit 1 735 MW.• TH Unit 2 735 MW.• CCGT Block 1 725 MW.• CCGT Block 2 725 MW.

Transferring of TH & CC Power Plants Transferring of TH & CC Power Plants

Source: EGAT PDP Source: EGAT PDP 20012001

• CCGT Block 2 725 MW.• CCGT Block 3 725 MW.

Page 8: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Appendix:Appendix:MiniMini Hydro ProjectsHydro Projects 8MiniMini Hydro ProjectsHydro Projects

Project Contract Structure

$����%����&��� ��

RATCH

RE EGATEGAT OMAPPA RE EGATHydro Operating Unit

EGATPower Purchaser

PPA

Mini Hydro Projects

• All commercial contracts i.e. Power Purchase Agreements (PPAs) and Operation and

Maintenance Agreement (OMA) have been structured to mitigate project risk

• 25 years non-firm SPP with tariff structure at Baht 1.68 per unit plus incentive of Baht 0.20

per unit from Energy Conservation Fund for the next 5 yearsper unit from Energy Conservation Fund for the next 5 years

Page 9: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCH Overview:RATCH Overview:Power Purchase AgreementPower Purchase Agreement 9Power Purchase AgreementPower Purchase Agreement

• Thermal Units and Combined Cycle Units have separate ���year PPAs.

PPA Tariff StructureUnits have separate ���year PPAs.

• Tariff is designed to cover all operating and financing costs and yield an equity Fixed O&M Costs FX/ Inflation

Adjustmentsand financing costs and yield an equity IRR of ��6�

• Revenues are from Availability Payments (“AP”) and Energy Payments

Availability Payment

Availability Factor

Debt Services

Adjustments

Interest Indexation

Return on EquityPayments (“AP”) and Energy Payments (“EP”).

• AP (Baht/MW/month) - includes fixed

Availability Factor Return on Equity

RATCHGENEGAT

• AP (Baht/MW/month) - includes fixed operation and maintenance expenses, debt servicing, and return on equity.

• AP is�payable irrespective of whether

Variable O&M Cost

Fuel Cost

Inflation Adjustments

Efficiency Factor

Energy Payment

• AP is�payable irrespective of whether electricity is dispatched or not as long as plants are available

Source : RATCHGEN

Fuel Cost Efficiency Factor

• EP (Baht/MWh) - includes fuel costs and variable operation and maintenance costs with inflation indexation and pass through mechanism.

Source : RATCHGEN

through mechanism.

Page 10: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCH Overview:RATCH Overview:Debt StructureDebt StructureDebt StructureDebt Structure

• Largest ever Baht project financing transaction in Thailand and one of the transaction in Thailand and one of the largest in Asia.

• Debt structure divided into:Tranche A

Lead Arrangers

Tranche A Term loan of Baht ��,����million Tranche B Working capital facility of Baht �,����

Tranche ABaht 42,500 MM.

�Tranche A1 - Baht 18,475 MM

Working capital facility of Baht �,����million

• The tenor of Tranche A and Tranche B is approximately �3 years.

Tranche A2 – Baht 18,716 MMl

� Tranche A3 –Baht 5,309 MM

approximately �3 years.• The interest rate of Tranche A is the

Minimum Lending Rate (“MLR”) and for Tranche B is the Minimum Overdraft

Tranche BBaht 1,500 MM

Tranche B is the Minimum Overdraft Rate (“MOR”).

• Foreign currency risk mitigated as all debt financing has been arranged in Baht. 21 August

9 Oct

2000 Loan

31 Oct

2000 1st

18 April 2002 2nd

1 Nov 2002 3rd

debt financing has been arranged in Baht.• Interest rate risk mitigated as it is passed

through the tariff.

21 August 2000 Term

sheet signed

Loan document

s signed

1st debt drawdow

n

2nd debt drawdow

n

3rd debt drawdow

nSource : RATCHGEN

ed

Page 11: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCH Overview:RATCH Overview:Operation and MaintenanceOperation and Maintenance 11Operation and MaintenanceOperation and Maintenance

• EGAT will operate and maintain RATCHGEN under the Operation and Maintenance (OMA).

Maintenance Schedule

• The OMA will expire in year 2010, one year from the completion of the first major maintenance of the last Combined Cycle Block transferred.

Thermal Generating Units No. of days Once everyWarranty Inspection - normal 40 -Minor Inspection 40 3 yearsMajor Overhaul 57 6 years

Combined Cycle Block transferred.

• Extended by mutual agreement between RATCHGEN and EGAT.

Combined Cycle Generating Units No. of days Once everyGas TurbinesGT Warranty Inspection - normal 26 -GT Combustion Inspection 15 1.5 yearsbetween RATCHGEN and EGAT.

• Scope of work covers routine operation and maintenance, provision

GT Combustion Inspection 15 1.5 yearsGT Minor Inspection 30 6 yearsGT Major Overhaul 52 6 years

Steam TurbinesST Warranty Inspection - normal 26 -operation and maintenance, provision

of major maintenance services and additional repair services.

Source : RATCHGEN

ST Warranty Inspection - normal 26 -ST Minor Inspection 26 3 yearsST Major Overhaul 49 6 years

• EGAT personnel experienced in commissioning and operating Combined Cycle and Thermal Power Plants.

Source : RATCHGEN

Plants.

Page 12: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

The Power Plant :The Power Plant :Facilities DescriptionFacilities Description 12Facilities DescriptionFacilities Description

• Located on -....��acres of land in • Located on -....��acres of land in

Ratchaburi Province, -��KM from

Bangkok, .�KM from Ampur Muang .�

Ratchaburi, and ��KM from Mae Klong

river.

• RATCHGEN’s total generating capacity

is ,(���MW. With combined capacity of

1,470 MW�for two thermal units and 1,470 MW�for two thermal units and

three Combined Cycle Units of 2,175

MW, RATCHGEN is Thailand's largest

and most advance private power

producer in Thailand

• The existing facility can support future • The existing facility can support future

expansion of upto �����MW.

Page 13: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCH Overview:RATCH Overview:Transmission SystemTransmission System 13Transmission SystemTransmission System

Page 14: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Power Plant & FacilitiesPower Plant & FacilitiesThermal Power PlantThermal Power Plant 14Thermal Power PlantThermal Power Plant

Generator Transmission Line

TransformerSteam Turbine

Transformer

Stack

Heat Exchanger

Condenser

Fan

Condenser

Dearator

Flue GasDesulferization

FGD

Fan BoilerEconomizer

Cooling TowerDearator

Economizer

ReservoirWater Treatment Plant ReservoirWater Treatment Plant

Page 15: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Power Plant & FacilitiesPower Plant & FacilitiesCombined Cycle Power PlantCombined Cycle Power Plant 15Combined Cycle Power PlantCombined Cycle Power Plant

Steam Generator

Heat Recovery Steam Generator (HRSG)

Transmission Line

Gas Turbine

Steam Generator

DearatorNatural Gas Inlet Value

Generator

Condenser

Transmission LineGenerator

Transformer

Stack CondenserTransformer

Generator

Cooling Tower

StackNatural Gas Inlet Value

Gas Turbine

Water PumpTransmission Line

Gas Turbine

Stack Water TreatmentPlantTransformer

Generator

ReservoirHeat Recovery Steam

Generator (HRSG)Generator (HRSG)

Page 16: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

RATCH Overview:RATCH Overview:Gas Sales Agreement (“GSA”)Gas Sales Agreement (“GSA”) 16Gas Sales Agreement (“GSA”)Gas Sales Agreement (“GSA”)

• Natural gas supplied by PTT will be sourced from gas fields in Myanmar.

Gas Pipeline System

sourced from gas fields in Myanmar.

• Aggregate proven reserves of .�trillion cubic feet exceeds gas consumption over cubic feet exceeds gas consumption over PPA term.

• Terms of the GSA will be requirement-• Terms of the GSA will be requirement-based with PTT subject to reasonable endeavors obligation.

• EGAT will be responsible for minimum take-or-pay obligation with PTT under Ratchaburi Master Gas Sales Agreement (“RMGSA”).(“RMGSA”).

• EGAT is obligated to make Availability Payments to RATCHGEN regardless of Payments to RATCHGEN regardless of availability of fuel

Page 17: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Power IndustryPower IndustryPower IndustryPower Industry

Page 18: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Power Industry:Power Industry:Forecast of Peak Generating in ThailandForecast of Peak Generating in Thailand 18

�������

Forecast of Peak Generating in ThailandForecast of Peak Generating in Thailand

'�(

������

������

������

'�)'�*

(�+'�,'�*

'�(

'�)'�)

'�)

������

������

������

)�-(�' (�.

(�.(�.)�+

(�- '�)'�*

(�.(�*

(�+'�, '�)

'�,'�)'�)

������

������

������

,�' ,�* �.�. �/�/,�) ,�-

)�0(�*)�-

(�' (�.(�.

/�'(�, (�(

(�((�( (�/

(�.(�*

(�+

�����

�����

������

,�' /�'

�����

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

��

�� ����

������������� �������������

Source: Thailand Load Forecasting Sub-committee,Source: Thailand Load Forecasting Sub-committee,Energy Planning and Policy Office (EPPO)

Page 19: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Power Industry:Power Industry:Average Annual Expansion of Power DemandAverage Annual Expansion of Power Demand 19Average Annual Expansion of Power DemandAverage Annual Expansion of Power Demand

������������������������������������

� ���������� � �����������������

� ���������� � �����������

���������� ����� ����� ��� �����

������

���������� ����� ����� ��� �����

!��������� ����� ����� ��� ���!��������� ����� ����� ��� ���

"��������� ����� ����� ���� �����"��������� ����� ����� ���� �����

������������ ����� ����� ���� �����

Source: Thailand Load Forecasting Sub-committee,

������������ ����� ����� ���� �����

Source: Thailand Load Forecasting Sub-committee,Energy Planning and Policy Office (EPPO), Aug 2002

Page 20: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Current Power Industry:Current Power Industry:Monthly Peak & Energy GenerationMonthly Peak & Energy Generation 20Monthly Peak & Energy GenerationMonthly Peak & Energy Generation

Peak GenerationMW

Peak Generation

15,500

16,000

16,500

17,000

15,500

16,000

16,500

17,000

5.1%4.5%

9.8%3.4%

7.3%7.7% 6.5%

5.4% 3.7%10.1%7.6% 8.3%

- Highest demand, so far, was on April 4th with 16,681MW with 3.44% increase yoy

13,000

13,500

14,000

14,500

15,000

13,000

13,500

14,000

14,500

15,0005.1%

3.3% 4.1%2.4% with 3.44% increase yoy

13,000Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Month

13,000

2002 2003 2001

-Average monthly energy generation growth in the fiscal year* is 5.07%

Energy Generation

10,000

10,500

GWh

10,000

10,500

8.5%

4.4%6.2% 6.6% 8.6% 5.9%

5.6%8.2%

year* is 5.07%-Average yearly energy generation growth in the fiscal year is 5.67%

8,000

8,500

9,000

9,500

8,000

8,500

9,000

9,500

3.9%

3.2%1.4%

3.2%1.7%

4.4%6.6%

5.6%13.6%

8.2%

13.0%

Source :EGAT , Energy Generation Monthly ReportSource :EGAT , Energy Generation Monthly Report

year is 5.67%* Thailand Government Fiscal year October* Thailand Government Fiscal year October--SeptemberSeptember

7,500Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Month

7,500

2001 2003 2002

Source :EGAT , Energy Generation Monthly ReportSource :EGAT , Energy Generation Monthly Report

Page 21: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Current Power Industry:Current Power Industry:Energy ConsumptionEnergy Consumption 21Energy ConsumptionEnergy Consumption

Energy Consumption for Energy Consumption for 2002 2002 compare with compare with 20032003

- The Large, Medium and Small General Service comprising over 70%

Sale Increase

GWh Weight (%) GWh Weight (%) (%)

Residential 7,422 20.98 7,918 21.22 6.67

Customer Category2002 2003 (Forcast)

General Service comprising over 70% of total electricity consumption.

- The average growth for all customer

Residential 7,422 20.98 7,918 21.22 6.67

< 150 kWh per month 453 1.28 464 1.24 2.57

> 150 kWh per month 6,970 19.71 7,453 19.97 6.94category in 2003 is 5.51% and residential is the most potential in demand growth.

> 150 kWh per month 6,970 19.71 7,453 19.97 6.94

Small General Services 4,870 13.77 5,141 13.78 5.57

Medium General Services

8,078 22.84 8,440 22.62 4.48 demand growth.- The Large Medium and Small General

service growth are 5.8% , 4.48% and 5.57% respectively, indicate the

Services8,078 22.84 8,440 22.62 4.48

Large General Services 12,092 34.19 12,793 34.28 5.80

Specific Business Services

1,601 4.53 1,676 4.49 4.675.57% respectively, indicate the growth for Thailand's industrial sector in year 2003

ServicesGovernment Institutions

1,146 3.24 1,183 3.17 3.19

Street Lighting 161 0.45 169 0.45 4.82

Total 35,371 100 37,319 100 5.51

Source: PEA 2002

Page 22: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Current Power Industry:Current Power Industry:Tariff StructureTariff Structure 22Tariff StructureTariff Structure

- The existing average retail tariff is about 4.05% higher than the marginal cost

DifferenceAverage Tariff (Baht/kWh)4.05% higher than the marginal cost based retail tariff.

- There is significant subsidization for the

Difference

Marginal Cost Based

Existing Tariff (%)

Residential 2.31 2.28 1.32

Customer CategoryAverage Tariff (Baht/kWh)

- There is significant subsidization for the agricultural pumping customers.

- The overall residential tariff reflects the marginal costs; however, the application

Residential 2.31 2.28 1.32

Small General Services 2.47 2.77 -10.83Medium General Services 1.94 2.30 -15.65 marginal costs; however, the application

of the progressive block rates has resulted in cross-subsidization within the category itself. Large residential

Services 1.94 2.30 -15.65

Large General Services 1.90 2.00 -5.00Specific Business Services 1.78 2.00 -11.00 category itself. Large residential

customers have to subsidize small residential customers.

Services 1.78 2.00 -11.00Government Institutions 2.31 2.27 1.76Agricultural Pumping

2.37 1.80 31.67- Moreover, customers under the small

/medium general services and specific business services will pay for electricity

Agricultural Pumping Service 2.37 1.80 31.67

Street Lighting 1.83 0.00

Total 2.11 2.20 -4.05business services will pay for electricity in excess of the marginal costs.

Total 2.11 2.20 -4.05

Source: EPPO, February 2001

Page 23: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Current Power Industry:Current Power Industry:Comparison of neighboring tariffsComparison of neighboring tariffs 23Comparison of neighboring tariffsComparison of neighboring tariffs

!����#������"���$$%�$�����&���'��������%!����#������"���$$%�$�����&���'��������%

� ��! !�

� ��! ��

� �� � �

(��������)���

� ��� ��

� ��� !�

� ��

� ��

� ��

� ��

� ��

� ��

� ��

� ��

� �!� !�� ��

� ��

� ��� ��

! !�

!

� !�� �!

� !�� ��� ��

� ��

"#$%���&�' (%�&#��� ���&$�#�&�' ����'

�)�& *���� +�'�,�&��#-�*�#- .&#-�/��� +���%�)�& *���� +�'�,�&��#-�*�#- .&#-�/��� +���%

- Thai tariffs are the lowest among the neighboring countries in almost all categories. Exceptional

Source : EGATSource : EGAT

- Thai tariffs are the lowest among the neighboring countries in almost all categories. Exceptional is in industrial classification.

- Average tariff is 2.45 Baht per unit for combined categoriesNote:1)�2001 figure (Oct 2000 – Sept 2001)1)�2001 figure (Oct 2000 – Sept 2001)2) Tariffs excluded VAT3) Average Baht 44.33/ US$

Page 24: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Benefits of Interest Benefits of Interest Benefits of Interest Benefits of Interest ReductionReductionReductionReduction

Page 25: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Benefit of Interest Reduction:Benefit of Interest Reduction:Interest SavingInterest Saving 25Interest SavingInterest Saving

��������1��������

(����������� ��������1�����

��� !��

�!��!� ���

���

���

���

�!��!� ���

������

���

���

���� ���� ���� ���! ���� ���� ����

����

* Average MLR of KTB, SCB, BBL and BAY

The amendment on loan agreements

���� ���� ���� ���! ���� ���� ����SCB, BBL and BAY

Interest rate reduction are as follows: -1. MLR* - 1.50% for period of the first three years (from July 1, 2002 to June 30, 2005.)2. MLR - 1.125% for period of the next three years (from July 1, 2005 to June 30, 2008.)2. MLR - 1.125% for period of the next three years (from July 1, 2005 to June 30, 2008.)3. MLR flat for the remaining period(starting from July 1,2008.)The total saving is around Baht 2,734 million

In conjunction, the prepayment fee will be 3%,2%and 1% pertinent to such periodsIn conjunction, the prepayment fee will be 3%,2%and 1% pertinent to such periods

Page 26: Thai Corporate Day · PPA Tariff Structure • Tariff is designed to cover all operating ... Small General Services 4,870 13.77 5,141 13.78 5.57 Medium General Services 8,078 22.84

Operating PerformanceOperating PerformanceOperating PerformanceOperating Performance

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Operating Performance Operating Performance 20012001&&20022002 27Operating Performance Operating Performance 20012001&&20022002

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Operating Performance Operating Performance 20022002 28

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Investment ConsiderationInvestment ConsiderationInvestment ConsiderationInvestment Consideration

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Why RATCH ?Why RATCH ? 30Why RATCH ?Why RATCH ?

Dominant Player

• RATCH is the largest private power producer in Thailand. Its forefront position and financial strength will serve as a solid platform for further

Dominant Player

position and financial strength will serve as a solid platform for further business expansions.

• Strong expansion economics with:

– Average EBITDA of approximately 9 billion Baht per annum during the next ten years.

– Excess cash after dividend at RATCH (payout ratio of 40% and net of debt reserve accounts) retention will be served for business expansion

– Competitive advantage for future expansion potential with minimal investment cost estimated at around US$ 500,000/ MW.investment cost estimated at around US$ 500,000/ MW.

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Why RATCH ?Why RATCH ?31

Why RATCH ?Why RATCH ?

Solid Industry Growth

• Electricity consumption still grow at a solid pace; country need new capacity in the near • Electricity consumption still grow at a solid pace; country need new capacity in the near future

Strong Earnings Growth

• Strong earnings growth from the 25 years well structured PPAs.

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Why RATCH ?Why RATCH ?32

Why RATCH ?Why RATCH ?

– Minimal earning swings from change in foreign exchange rate as

Low Risk

– Minimal earning swings from change in foreign exchange rate as

total financing will be in Thai Baht.

– No Minimum-Take-Or-Pay risk on natural gas purchases from – No Minimum-Take-Or-Pay risk on natural gas purchases from

PTT.

– Availability Payments will be received irrespective of whether – Availability Payments will be received irrespective of whether electricity is dispatched or any fuel supply disruptions.

– Protected from impact of change in law and Grid Code via the – Protected from impact of change in law and Grid Code via the

ability to pass through cost increases above certain thresholds.

– Minimum DSCR of 1.2x and average DSCR of 1.7x over the life – Minimum DSCR of 1.2x and average DSCR of 1.7x over the life

of all outstanding debt.

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Awards in Awards in 20022002Awards in Awards in 20022002

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Awards in Awards in 2002 2002 ::Good Corporate GovernanceGood Corporate Governance 34Good Corporate GovernanceGood Corporate Governance

- RATCH ranked the 3rd in Asiamoney corporate governance poll for utilities sector in Asiapoll for utilities sector in Asia

Source : Asiamoney October Source : Asiamoney October 20022002

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Awards in Awards in 2002 2002 ::Good Corporate GovernanceGood Corporate Governance 35Good Corporate GovernanceGood Corporate Governance

Award Title : Disclosure Award

Award details : Disclosure of Form 56-1

(Particular on Risk Factors and

Nature of Business)

Organizer : The Office of the Securities Organizer : The Office of the Securities

and Exchange

CommissionCommission

Date : 5th November 2002

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Awards in Awards in 2002 2002 ::Environmental and Social ResponsibilitiesEnvironmental and Social Responsibilities 36Environmental and Social ResponsibilitiesEnvironmental and Social Responsibilities

Award Title : Excellent quality Award onNationwide basisNationwide basis

Award details : Excellent maintenance ofNavaratchaburirom ParkNavaratchaburirom Park(a recreational center located in front of the power plant built and maintained by Ratchburi and maintained by Ratchburi Generating Co.)

Organizer : Ministry of Public Health Date Organizer : Ministry of Public Health Date 31st October 2002

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AppendixAppendixAppendixAppendix

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Appendix: Appendix: Thai Electricity Market Structure Thai Electricity Market Structure -- Current StructureCurrent Structure 38Thai Electricity Market Structure Thai Electricity Market Structure -- Current StructureCurrent Structure

Key Features of current structureSPPs EGATIPPs RATCHEGCO

• Currently, the private sector has only a limited role ( generation only).

• EGAT has a market monopoly at the wholesale

SPPs EGATIPPs EGCO

•Power Purchase• EGAT has a market monopoly at the wholesale level, supplying electricity to PEA, MEA and some direct customers.

• There are few incentives for private power

Governm

ent

EGAT

•Power Purchase•System Operation•Transmission•Bulk Power Supply

• There are few incentives for private power producers to improve efficiency due to lack of market competition (aside from when bidding for the PPA with EGAT).

PEA MEADirect Customers

the PPA with EGAT).

• As EGAT is responsible for long-term electricity planning, new generating capacity must be

Customers Customers

planned and approved through/by EGAT.

• PEA and MEA are responsible for distribution/retail supply to most end users at the EGAT: Electricity Generating Authority of Thailand

Source: Electricity Supply Industry Reform and Thailand Power Pool, November 2000, modified by RATCH consultant

distribution/retail supply to most end users at the prices regulated by EPPO.

• In some limited cases (mostly industrial users), some end users are able to purchase electricity

EGAT: Electricity Generating Authority of ThailandPEA: Provincial Electricity AuthorityMEA: Metropolitan Electricity AuthoritySPP: Small Power Producer

some end users are able to purchase electricity either directly from EGAT or SPPs.

SPP: Small Power ProducerIPP: Independent Power ProducerEPPO: Energy Policy and Planning Office

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Appendix:Appendix:Thai Electricity Market Structure Thai Electricity Market Structure –– New Electricity Supply ArrangementNew Electricity Supply Arrangement39Thai Electricity Market Structure Thai Electricity Market Structure –– New Electricity Supply ArrangementNew Electricity Supply Arrangement

Hydro Plants GENCOsGE

NC

Os

- Over the time of Power Pool operating, customer groups

Key Features of NESA structure

Hydro Plants

Independent System Operator

Forward &

Financial Market

GENCOsB

ilateral Contract

Bilateral C

ontract

GE

NC

Os

and interest parties need for reform it to improve for more efficiency, economic and transparency in the operation of pricing.

Independent System Operator

Forward &

Financial Market

Grid Company

Spot Market

Bilateral C

ontract

Bilateral C

ontract

Bilateral

Contract

Supplier

Custom

er

- NESA provide greater choice for market participants than the Pool-based trading to purchase and trade electricity with more active demand-side participation in the

Supply

Distribution

Direct Customers

Forward &

Financial Market

REDCO

Bilateral C

ontract

Bilateral C

ontractSupplier D

irect C

ustomer

Trader

market, while maintaining the operation of a secure and reliable electricity system by the establishment of close to real time balancing arrangements.

Balancing

Mechanism

SupplyDirect Customers

Customers

Forward &

Financial Market

Retail Co.- The forward trading would lead to the emergence of forward price curves that would better facilitate efficient new entry, by providing both generators and suppliers

Balancing

Mechanism

CustomersR

etailerwith clearer signals.

- The new balancing mechanism and settlement arrangements were designed to ensure the national grid

Source: Electricity Supply Industry Reform and Thailand Power Pool, November 2000

arrangements were designed to ensure the national grid company and independent system operator (ISO) was able to maintain short-term quality and security of supply

- The Balancing Mechanism and the Settlement process required new IT systems to be built and operated.

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Appendix:Appendix:Thai Electricity Market StructureThai Electricity Market Structure -- Third Party AccessThird Party Access 40Thai Electricity Market StructureThai Electricity Market Structure -- Third Party AccessThird Party Access

Key features of third party access

• Under a third party access system, EGAT would in • Under a third party access system, EGAT would in most cases maintain its monopoly at the wholesale market level (central supplier).

SPPs GENCOsIPPs RATCHEGCO

• “Third Party Access” regime would be introduced so that generating companies could directly supply end users through the network of PEA, MEA or EGAT.

IND

EP

EN

DE

NT R

EG

ULA

TOR

EGAT

•Power Purchase•System Operation•Transmission•Bulk Power Supply

users through the network of PEA, MEA or EGAT.

• An Independent Regulator would be set up to regulate transmission/distribution pricing and other standards.

IND

EP

EN

DE

NT R

EG

ULA

TOR

PEA MEA

transmission/distribution pricing and other standards.

• EGAT’s power generating assets (i.e. Thermal, Hydro, CCGTs, etc.) would be ring-fenced (and/or

Large Customers Small Customers Small Customers

Hydro, CCGTs, etc.) would be ring-fenced (and/or grouped) and operate as business units (profit centres). Source: Electricity Supply Industry Reform and Thailand

Power Pool, November 2000, modified by RATCH • EGAT would be structured as a holding company.

Grid Company and other subsidiaries would be separated out and incorporated as separate entities,

Power Pool, November 2000, modified by RATCH consultant

separated out and incorporated as separate entities, whist remaining under the EGAT holding company.

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Appendix: Appendix: Operation and Maintenance Schedule for Operation and Maintenance Schedule for 20032003 41Operation and Maintenance Schedule for Operation and Maintenance Schedule for 20032003

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Appendix:Appendix:MiniMini Hydro ProjectsHydro Projects 42MiniMini Hydro ProjectsHydro Projects

Project Contract Structure

$����%����&��� ��

RATCH

RE EGATHydro Operating Unit

EGATPower Purchaser

OMAPPAHydro Operating UnitPower Purchaser

Mini Hydro Projects

• All commercial contracts i.e. Power Purchase Agreements (PPAs) and Operation and

Maintenance Agreement (OMA) have been structured to mitigate project risk

• 25 years non-firm SPP with tariff structure at Baht 1.68 per unit plus incentive of Baht 0.20

per unit from Energy Conservation Fund for the next 5 yearsper unit from Energy Conservation Fund for the next 5 years

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Appendix:Appendix:Mini Hydropower Development ProjectsMini Hydropower Development Projects 43Mini Hydropower Development ProjectsMini Hydropower Development Projects

Project Chao Phraya Pasak Cholasith Khlong Tha DanProject Chao Phraya Pasak Cholasith Khlong Tha Dan

Installed Capacity (MW) 12 6 10

Type of PPA Non�firm Non�firm Non-firm

Term of PPA (yrs) 25 25 25Term of PPA (yrs) 25 25 25

Location (Province) Chainat Lopburi Nakorn Nayok

Energy Generation (GWh/ yr) 60�52 31�81 27�99

Use in Station Service and RID (GWh ��yr) 0�54 0�54 ��54

Energy Sale (GWh ��yr) 59�98 31.� � 27�45

Project Cost (Million Baht) 657 �87 324 �04 278 �50Project Cost (Million Baht) 657 �87 324 �04 278 �50

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Appendix: Appendix: Future ProjectsFuture Projects 44Future ProjectsFuture ProjectsBiomass Projects*

Project Ayutthaya Suphanburi• All commercial contracts i.e. Power

Purchase Agreements (PPAs) and Husk Sell Agreement (HSA) have been

Project Ayutthaya Suphanburi

Installed Capacity (MW) 9.9

Type of PPA Firm Firm

9.9

Sell Agreement (HSA) have been structured to mitigate project risk. To ensure the supply of husk, rice mill will

Type of PPA Firm Firm

Term of PPA (Yrs.) 21 21

Location (Province) Ayutthaya Suphanburi

be shareholder in each project

• Tentative 21 years firm SPP with tariff structure at Baht 2.30 per unit

Energy Generation 70 70

Use in Station Service 8 8

Energy Sale 62 62

(GWh/yr)

(GWh/yr)

Biomass Projects

structure at Baht 2.30 per unit

*Under studying projects

Energy Sale 62 62

Project Cost 520 520

(GWh/yr)

(Million Bath)

RATCH*Under studying projects

NP

Rice MillEGATPower Purchaser

PPA

Project 1,2,3..NHSA

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Powering the FuturePowering the FuturePowering the FuturePowering the Future