Norkhun Sitthipong, deputy permanent secretary to the Energy Ministry, said the new company, called International Co Ltd, would take part in a Bt2.8-billion electricity transmission wire project with a Laos-based electricity agency as its first project. Thai and Lao agencies will each hold a 50 per cent stake in the project.

The new company will be the commercial arm for Egat, whose directors will discuss its investment plan on Thursday before submitting their recommendations for the Cabinet's approval.

"As a state enterprise, Egat has faced a lot of constraints in terms of investment. Therefore, the board approved the setting of up a new subsidiary after it was prevented from being listed on the stock exchange. But we have to study in detail whether we plan to list the new subsidiary on the stock market," Norkhun said.

Egat will hold 100 per cent of the shares in the new company. Once set up, International Co Ltd will invest in the 500-KV transmission cable project with the Lao electricity agency. The 23km cable will be laid from Vientiane to Udon Thani.

The wire will receive electricity from four hydro dam projects in Laos, with an estimated

power supply of 1,600 megawatts. The power will be generated from the Nam Nguem and Nam Thuen dams in Laos.

The Laotian side had invited Egat to jointly invest in the project. Egat is due to gives its answer on whether it agrees to co-invest in the electricity wire in six months.

Moreover, the board also agreed to lay down a framework for the sale of Egat bonds to raise Bt3.4 billion. The first two sets of bonds, totalling Bt1 billion and Bt1.4billion, and with 15- and 10-year redemption periods, respectively, will be issued on August 31. The second issue will be made on September 29. These bonds will total Bt1 billion and have a redemption period of seven years.

Egat will consider whether to issue a further lot of bonds worth Bt4 billion after September.

Norkun said that in the meeting the board had also approved Egat to sign an agreement to purchase electricity from North Pra Nakhon power plant to create transparancy in its operations. He said the power supply from North Pra Nakhon power plant should not be more expensive than that supplied by the private sector.

Norkun said Egat is currently adjusting its power production plan for 2007 to 2022, which will be submitted to the regulators.

As for the period 2011 to 2015, when Egat is scheduled to open the bidding for the Independent Power Producer (IPP) project, initially hydro electricity will account for 20 per cent of the total, while the rest of the supply will come from natural coal and gas.