Siam Commercial Bank (SCB), a Bangkok-based major player in investment banking, has been appointed as Electricity Generating Authority of Thailand (Egat)'s financial adviser to study the feasibility of setting up an infrastructure fund with initial size of no more than Bt10 billion (US$325 million).

Egat is a state enterprise that owns and manages the majority of Thailand's electricity generation capacity, as well as the nation's transmission network.

The study will take four months before being proposed to the Cabinet for consideration.

Egat is the first state enterprise to be granted permission by the Finance Ministry to raise money through an infrastructure fund. It will be a pilot project for state enterprises in Thailand that want to raise money from the capital market.

Proceeds raised through the fund would be used to fund investments of Bt400 billion (US$13 billion) to support its five-year investment programme of installing transmission lines and developing power plants.

Egat earlier issued debentures with a coupon rate of 4.725 % to finance its capital expenditure costs.

In the first stage, Egat's 700-800-megawatt North Bangkok Power Plant (NBK) would be sold to the infrastructure fund. Egat is constructing a second unit of the NBK with capacity of 800MW. The second unit will be completed in 2016, after which Egat will consider adding it as an asset to be sold to the infrastructure fund.

SCB is managing a planned Bt100-billion infrastructure fund for True Corp, a Thai communication conglomerate. SCB hopes to underwrite the True Corp fund before the end of this year. If this is achieved, it will become the third infrastructure fund in Thailand after the BTS Growth Infrastructure Fund and Amata B Grimm's fund.