The Asian Development Bank (ADB) has subscribed to 64 million shares worth B2,880 million ($88 million) of an initial public offering (IPO) of Thailand’s Gulf Energy Development Public Company Limited (Gulf Energy). Gulf Energy, which began trading on the Stock Exchange of Thailand (SET) on 6 December 2017, raised B23,999 million ($733 million) through the offering.
ADB’s financing will also include an investment made on behalf of the Leading Asia’s Private Infrastructure Fund (LEAP), one of ADB’s cofinancing vehicles dedicated to private sector infrastructure in Asia and the Pacific. The Japan International Cooperation Agency supports LEAP, launched in August 2016, through a $1.5 billion equity commitment. This is LEAP’s first equity investment.
“This investment shows ADB’s long-term commitment to working with strong local energy producers in Southeast Asia,” said Christopher Thieme, Deputy Director General of ADB’s Private Sector Operations Department. “ADB’s support for the IPO demonstrates our confidence in Gulf Energy’s business model and expansion strategy.”
Gulf Energy is one of the leading private power producers in Thailand with a total gross installed power capacity of 11,125.6 megawatts (MW) under operation and development. Gulf Energy has 17 power projects in operation, including 2 gas-fired independent power producers (IPPs), 11 gas-fired small power producers (SPPs) (Cogen), and 4 rooftop solar very small power producers, and has 11 power projects under construction and development, including 2 gas-fired IPPs, 8 gas-fired SPPs (Cogen), and 1 biomass SPP.
Gulf Energy intends to use part of the IPO proceeds to increase Thailand’s installed power generation capacity as well as seek growth opportunities to expand its energy portfolio outside of Thailand and into renewable energy.
Thailand is the second largest energy consumer in Southeast Asia. Power demand is expected to grow 2.67% annually over the next two decades. According to the latest Thailand Power Development Plan, the country plans to add new capacity of 57,459 MW and retire capacity of 24,736 MW during 2015-2036.