Gunkul Engineering targets 25 billion baht to fund renewable energy projects

Gunkul Engineering Plc, a leading renewables developer and construction company, announced intentions to generate 20.8-25 billion baht (US$607 million-730 million) through fundraising. The raised funds are earmarked for the development of 17 renewable energy initiatives, as part of the government’s 5.2-gigawatt renewable scheme. The company’s chief financial officer, Thitipong Techaratanayuenyong, disclosed the plans.

In the previous year, Gunkul Engineering participated in an auction held by the Energy Regulatory Commission, submitting proposals for 27 projects. The company was successful in securing the rights to develop 17 of these, representing a combined power generation capacity of 832.4 megawatts.

The company has already signed 25-year power purchase agreements with the Electricity Generating Authority of Thailand (EGAT) for eight of these 17 projects last month. Thitipong is optimistic about the company penning down agreements for the remaining nine projects within the current year.

The development of these 17 projects is estimated to require 25-30 million baht per megawatt of capacity. Thitipong explained that almost 70% of the required funding would be raised through loan procurements from banks and other fundraising efforts. The remaining 30% would be covered by the company’s accumulated net profit and existing cash reserves.

Despite Gunkul’s debt-to-equity ratio being close to one, Thitipong assured that the company is in a position to secure additional loans. The company also plans to allocate a portion of its investment budget (worth 32 billion baht (US$934 million) for 2022-25) to support the development of 17 renewable projects.

The projects include solar farms (both on-ground and those equipped with battery energy storage systems) and wind farms. These projects will benefit from a feed-in tariff ranging from 2.1679 to 3.3331 baht (US$0.097) per kilowatt hour over 25 years, as per the power purchase agreements, reported Bangkok Post.

The first eight projects to be developed boast a total contracted capacity of 429.6MW. They are anticipated to commence operations between 2026 and 2030, according to Sopacha Dhumrongpiyawut, a director at Gunkul Engineering. These new projects will significantly bolster Gunkul’s capacity, increasing it to 1,045.15MW from the current 615.55MW, said Sopacha.

“We will gradually sign more power purchase agreements.”