The SET-listed power producer Glow Energy Plc is planning to raise 16-17 billion baht for financing its aggressive capacity expansion in Thailand over the next two years as business eases back to normal in the second half of this year.

The Thai unit of France-based GDF Suez Energy International expects its normalised net profit (before unrealised foreign exchange gains and losses) will reach 2 billion baht in the latter half, compared with 1.7 billion in the first six months, lifting its bottom line to be on par with 2008.

In addition to its existing cash on hand of 7-8 billion baht, the same amount will be mobilised next year and another 9 billion in 2011 in bank loans and from the bond market, according to Esa Heiskanen, chief executive officer of Glow Group.

The additional funding will serve Glow's 51-billion-baht, three-year investment programme to lift capacity by 1,300 megawatts or 67% by 2011.

"Our current cash on hand is higher than normal but this is an exceptional circumstance," said Mr Heiskanen, adding that about 8 billion baht was left over from 9 billion baht worth of bank loans raised late last year.

"At the moment, bank loans are more liquid and offer better [interest] rates. But we do have a single-A credit rating, so we can also go for the bond market," he said.

Glow has 1,800 MW in operation together with 1,000 tonnes per hour of steam. The company is building three power plants that would add 1,150 MW by next year, including the 115 MW of cogeneration to become available in the final quarter of this year. Two plants will be operational in 2011: a 660-MW coal-fired unit and a 382-MW gas-fired unit.

Thanks to strong demand for petrochemical products from China, Mr Heiskanen said power consumption from Glow's clients had recovered faster than expected after falling sharply in the the last quarter of 2008.

"Demand has almost fully recovered by now. Today we are running at close to full capacity and we expect this to continue for the rest of the year," he said.

In the quarter to June, Glow's net profit doubled to 1.55 billion baht from 737 million a year earlier, bringing first-half net profit to 2 billion. Revenue totalled 17.65 billion baht in the six-month period, up 5.1% year-on-year.

Mr Heiskanen said Glow's performance in the second half would be the same as the first half of 2008.

"We expect the net profit will be the same as in 2008 when it was 3.8 billion baht," he said, noting that 2008 was the company's worst performance year since 2003. "In past years our profit was more or less 4 billion baht every year with the same capacity utilisation since 2005."

Power consumption should be relatively flat compared with last year, even though the local economy has slid.

Power demand in Thailand not only comes from industry but also from improving standards of living, making electricity consumption grow slightly more than economic growth, he said.

"Even if Thai economic growth is negative this year, electricity consumption should be pretty much flat," said Mr Heiskanen.

Meanwhile, Glow is studying the feasibility of wind farms, with three locations are having wind speeds measured. The measurements, started earlier this year, take 12-14 months to finish.

A 30-MW wind farm power plant requires about $50 million to build. The company is also in the pre-feasibility stage for developing solar power projects.

"We will know by the first quarter of next year whether it is feasible. [If so], the projects would be more realistic in 2011," he said.

"We don't allocate a budget until we know the project is feasible, [but] we can raise the funding if we need the money for wind and solar power," he added.

Shares of Glow closed on Friday on the Stock Exchange of Thailand at 31.25 baht, unchanged, in trade worth 100 million baht.