Dear shareholders and stakeholders,

2018 was a year of great challenges to the Company’s business. Regarding the washout of the Saddle Dam D of Xe-Pian Xe-Namnoy Hydroelectric Power Project in Lao PDR which is under construction, we hereby express our deepest condolences to villagers, communities, the Lao government and related parties that are affected by the incident.
With 25% stake by the company, Xe-Pian Xe-Namnoy Power Co., Ltd, the project’s operator that holds the concession, has fully cooperated with the Lao government. The government established a fact-finding committee and a committee to estimate damages, restore and rehabilitate the place and people in various aspects, to normalize the situation as soon as possible. In our part, we did our best in addressing the Lao government’s requests, by providing a budget, necessary items and personnel supports to relieve the sufferings of local residents and the relevant parties.

The investigation into the cause of the incident is underway, under the supervision of the fact-finding committee chaired by the Deputy Prime Minister of Lao PDR. Meanwhile, problem management and efforts to mitigate impacts on communities, society, economy and environment have been run along with the investigation, with considerable progress. On January 26, 2019, the Lao government approved the compensation to the families of the 71 dead and missing persons, USD 10,000 each. Meanwhile, damage is being estimated and the integrated rehabilitation plan covering community, social, economic and environmental aspects is being drafted. In addition, the concession holder and the project contractor have already built and delivered 800 shelter homes to the Lao government as temporary accommodations for the affected people.

On the part of impact on the project development, Xe-Pian Xe-Namnoy Power Co., Ltd. has dispatched a team of experts and representatives of relevant agencies to inspect the cause of the incident and prepared a project, communities and the environment restoration plan which was submitted to the Ministry of Planning and Investment and the Ministry of Energy and Mines in September 2018. If the plan is approved, the project will begin relevant construction including a roller compacted concrete dam to replace the earth-filled Saddle Dam D.

The financial impacts on The company, holding a 25% stake in the project, are not huge and acceptable. However, we have reviewed the lessons learnt from this incident, to improve our project-level risk management process. These include Dam Break Analysis, the assessment of surrounding community risk and the preparation of an emergency and evacuation plan for main and secondary dams to avoid a repeat of the undesirable incident.

Infrastructure business expansion
Under the Thailand 4.0 and 20-year national strategies, the government aims to achieve sustainable development in all dimensions. In the economic dimension, infrastructure development is in focus to support the investment in technology and innovation-oriented industries and improve quality of life overall. The company considers this an opportunity to help support the corporate growth, aside from electricity generation which is the Company’s core business.

In 2018, We introduced a new vision “to become a leading value-oriented energy and infrastructure company in Asia Pacific,” reflecting our expectation and business opportunities that will support our prosperity. The Company invested 194.59 million baht in a water supply project in Lao PDR, which is our third infrastructure project following Pink Line monorail and Yellow Line monorail in Thailand which were unveiled in 2017.

Emphasis on power plant efficiency and employees/suppliers’ safety
The Company’s main power plants have been operational for more than 10 years and the Company’s main mission has emphasized production efficiency, to meet the contractual availability and ensure all stakeholders’ safety. In 2018, the power plants in which the company has operating control generated a total of 18,262,933 MWh, achieving the targeted availability, reliability and heat rate.

Joint development of operation and maintenance innovations with suppliers
Ratchaburi Power Plant and Tri Energy Power Plant, which are the Company’s main power plants, have encouraged operation and maintenance service providers to enhance generation efficiency. Among the innovations were the invention of an underwater vehicle to take the underwater photos of the power plant such as the Solid Contact Unit, confined areas or other risky spots which helps extend the maintenance schedules and efficiently reduce maintenance expenses; and the study on Wet Pack innovation applied when Ratchaburi Power Plant received the reserved shutdown order which lasted a long period. Wet Pack kept machinery ready for immediate resumption upon order.

Greenhouse gas management
The Company and all power plants have strived to improve the generation process and reduce energy and resources consumption for mitigating greenhouse gas emissions. The focus is also extended to communities through energy-saving and forest conservation projects. In 2018, Ratchaburi Power Plant joined the development of Thailand Voluntary Emission Reduction Program (T-VER) of Greenhouse Gas Management Organization (Public Organization).
Under energy efficiency program, 6,577 LED light bulbs were installed, thus reducing greenhouse gas emissions by 771 tCO2e per year.

Ratchaburi Power Plant together with EGAT, as a supplier, conducted a research to increase gas turbine capacity amid temperature increases by reducing air temperature before hitting Air Inlet Filter, allowing gas turbines to work at their full capacity and generating power as demanded by customers despite higher temperature outside.

This Sustainability Report presents sustainable development strategies and approaches; solutions to material issues; and the performance in economic, environmental and social aspects. I hereby thanked the Board of Directors, the Management, employees and all stakeholders for your suggestions useful for the improvement of this Sustainability Report. The company is committed to moving forward towards sustainable growth, together with stewardship of relevant parties.