Last year, the Electricity Generating Authority of Thailand (EGAT) was corporatized on June 24 2005 by conversion to a public limited company. Two Royal Decrees were published, one stipulating powers, rights and benefits of EGAT pcl, and one repealing the Electricity Generating Authority of Thailand Act.
EGAT was a party to power purchase agreements with independent power producers (IPPs), small power producers (SPPs) and other generators, who commenced to invoice EGAT pcl. EGAT pcl, which was 100% owned by the Ministry of Finance, made preparations for an IPO, offering no more than 25% of its shares to the public.
In November 2005, the IPO was suspended, and on March 23 2006, the Supreme Administrative Court revoked the two Royal Decrees that had been promulgated in connection with the corporatization. A period of uncertainty followed. On April 21 2006, the Council of State issued an opinion to the Ministry of Energy as to the effect of the judgment of the Administrative Court, which stated:
- the Electricity Generating Authority of Thailand Act had not been repealed;
- EGAT is still a state enterprise established and existing under the Act;
- EGAT pcl never existed; and
- all juristic acts, contracts and transactions executed by EGAT pcl are deemed executed by EGAT.
Investors in electricity generation in Thailand are awaiting a solicitation for new IPPs, expected in late 2006 or early 2007. In 1994 the first solicitation was issued and administered by EGAT, and resulted in the award of seven power-purchase agreements (PPAs) for IPP projects, all of which have been completed or achieved financial close. The Ministry of Energy will issue the next solicitation, and EGAT and its affiliates will not be eligible to bid for new PPAs. The terms of the new solicitation have not been finalized.
A T Chandler
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