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Hongkong Electric acquires Thai power project

Hongkong Electric Holdings Limited (HEH) announced that its investment arm - Hongkong Electric International Limited (HEI) - will invest in a power plant project in Thailand through a joint venture company - Union Power Development Company Limited (UPDC). Pertaining to the terms and conditions of the acquisition, HEI will acquire 27.5% of the project at commercial operation as one of the two largest shareholders, the other is Tomen of Japan.

Other shareholders of UPDC are Union Energy of Saha Union, Chubu Electric and Toyota Tsusho.

The HK$9.8 billion investment project is a 1,400 megawatt coal-fired power plant located in Hin Krut, southwest of Bangkok. About 75% of the total investment will be raised by a non-recourse financing arrangement. Hongkong Electric's equity investment will be about HK$700 million.

The project will sell 100% of its electricity to Electricity Generating Authority of Thailand (EGAT), which is state owned. It has secured a 25 years take-or-pay power purchase agreement, with its revenue indexed to US$/Thai Baht exchange rate.

The project is due to be completed by the end of 2005, and Hongkong Electric will be responsible for its construction management.

EIA reports on the power plant project have been approved and local construction permits have been issued by the Thai Government.

A spokesman for HEH said, "This power project in Thailand will be Hongkong Electric's third major overseas investment and is in line with our plan to expand internationally, capitalising on our experience and technical expertise. This is a secure investment with a relatively high return for a project of this nature." The Group acquired two electricity distribution businesses in Australia in 1999 and 2000.

28th October 2001

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