Japan?s TEPCO acquires 14% stake in Paiton I power plant

Japanese firm Tokyo Electric Power Company, Inc. (TEPCO) announced Wednesday it had signed a purchase and sale agreement to acquire a total of 14 percent stake in the Paiton I coal-fired power plant in East Java for US$137 million.

TEPCO said the seller on the acquisition are TransCanada Corporation (11 percent) and GE Commercial Finance Energy Financial Services (3 percent).

The 2x615-megawatt power plant, which was completed in early 1999, owned and managed by a joint venture company PT Paiton Energy.

The power plant has a 40-year power purchase agreement (PPA) from 2001 to sell power to state-owned electricity company PT PLN.

TEPCO said it also intended to purchase a 15 percent stake in the Paiton operation and maintenance (O&M) company from IPM Eagle LLP, a partnership of International Power plc from the U.K. and Japan's Mitsui & Co., Ltd.

?Participation in this established project affords TEPCO an attractive investment opportunity based on the stable returns expected from the long term PPA with PLN,? TEPCO added.

This acquisition makes TEPCO the first Japanese electric power company to invest in the Independent Power Producer business in Indonesia. (Robert)