Thailand’s Banpu Power invests $80 million in Nakoso IGCC Management

05, Apr. 2021

The Newstan Mine Project in Australia is one of the overseasplants operated by Banpu Public Co. Ltd., the parent company of Banpu Power Investment Co. Banpu Power is acquiring a third of the Nakoso IGCC plant in Fukushima prefecture of Japan, after investing $80 million. (Photo courtesy of Banpu Public Co.)
The Newstan Mine Project in Australia is one of the overseasplants operated by Banpu Public Co. Ltd., the parent company of Banpu Power Investment Co. Banpu Power is acquiring a third of the Nakoso IGCC plant in Fukushima prefecture of Japan, after investing $80 million. (Photo courtesy of Banpu Public Co.)

BANGKOK, NNA - Thailand’s major energy producer Banpu Power Public Co. (BPP) is set to acquire one third of Nakoso IGCC Management Co. (NIMCO) in a $80 million (2.5 billion baht) deal.

Banpu Power Investment Co., a wholly owned subsidiary of Banpu Public Co. (BANPU), reported the share purchase agreement in a filing to the Stock Exchange of Thailand on Thursday.

With the investment, Banpu Power will own 33.5 percent of Nakoso IGCC Management Co. Mitsubishi Corporation Power Ltd., the majority shareholder, will hold a 66.5 percent stake.

The transaction will also see BPP holding 13.4 percent of Nakoso IGCC power plant in Fukushima prefecture in Japan. It is expected to generate 543,000 kilowatts of electricity when ready later this year.

Nakoso IGCC plant, which was established by a consortium led by Mitsubishi Corporation Power, will run on an integrated gasification combined cycle (IGCC), a process which uses high pressure gasifiers to turn coal into synthesis gas.

“The IGCC is a cutting-edge proven technology that has been in research and development for more than 30 years,” said Kirana Limpaphayom, CEO of Banpu Power.

“Nakoso power plant is considered as the largest plant using integrated gasification combined cycle. The power plant is expected to achieve commercial operation by 2021, while the company has a long term fuel supply contract under power purchase agreement in place,” he added.

Limpaphayom said, "We have joined hands with Mitsubishi Corporation Power Ltd. (Japan), a global business leader who has long-standing expertise in high-efficiency power plant development. Most importantly, this investment is low risk because there is a long-term power purchase agreement with a long-term fuel supply agreement already in place. Each partner's strengths are structurally applied to the project management with explicitly defined roles and responsibilities."

He said the investment is in line with Banpu Power's strategy in seeking opportunities in projects nearing commercial operation and generating cash flows soon, apart from considerations like highly efficient and sustainable production technology and high-demand markets with government support to help achieve its growth target with consistently strong cash flows.

Banpu Power’s latest investment is on top of its ongoing efforts to produce up to 5.3 million kilowatts of thermal and renewable energy by 2025.

Last year, the company was able to produce an extra 2.7 million kilowatts following its acquisition of Mui Dinh wind farm in Vietnam, Shanxi Lu Guang power project in China and two solar farms in Yamagata and Yabuki in Japan.

In 2021, Banpu Power is expected to complete the construction of two new solar projects - in Shirakawa and Kesennuma in Japan.

Shirakawa solar farm is expected to have a capacity of 10,000 kilowatts, while Kesennuma will generate 20,000 kilowatts.

“BPP will continue its sustainable growth strategy to achieve a capacity target of 5.3 million kilowatts in 2025, seeking investment opportunities in power projects by focusing on cleaner technology in the markets with attractive growth and supportive government policy,” said Kirana.

In 2020, the company made a revenue of 5.5 billion baht from providing electricity to consumers. Its main contribution of 4.85 billion baht came from steam and power sales in China.