Egco sells stake in three Indonesian power plants

PUBLISHED : 28 Dec 2022 at 05:24

NEWSPAPER SECTION: Business

WRITER: Yuthana Praiwan

SET-listed Electricity Generating (Egco), a power generation arm of state-run Electricity Generating Authority of Thailand, has divested its entire stake worth US$485 million in three geothermal power plants in Indonesia in order to make new investments, especially in renewable energy.

The divestment gives Egco more opportunity to shape its future, said Thepparat Theppitak, president of Egco.

Phoenix Power BV, Egco's wholly-owned subsidiary, sold a 20% share in Star Energy Geothermal Pte (SEG) to Star Energy Group Holdings Pte.

The company also divested a 30.25% share in Star Phoenix Geothermal JV BV (SPG).

The share sale agreements were made on Nov 16 and the transaction process was completed last week.

"The decision to sell all the shares is part of Egco's strategy to rationalise the company's asset portfolio," said Mr Thepparat.

Egco ventured into the energy business in Indonesia in 2014 through investments in SEG and SPG, which owned stakes in SEG Wayang Windu and SEG Salak-Darajat BV.

SEG Wayang Windo owns and operates a Wayang Windu geothermal power plant, with installed electricity generation capacity of 227 megawatts. The facility is situated in West Java.

SEG Salak-Darajat BV runs two geothermal power plants -- Salak and Darajat. These are also located in West Java.

Salak has a total installed capacity of 376.8MW, made up of steam production (180MW) and electricity generation (196.8MW).

Darajat is designed to have a total capacity of 271MW, made up of steam production (55MW) and power generation (216MW).

The three geothermal power plants supply electricity under a long-term take-or-pay agreement to PT PLN (Persero), a state-owned enterprise and the sole offtaker and distributor of electricity in Indonesia.

Mr Thepparat is looking forward to bright business prospects following the company's divestment of the shares.

"Egco will be able to gain profit from the share disposal and strengthen its financial position to support new investment opportunities in the future, especially in renewable and clean energy projects, with superior growth potential," he said.