Banpu Power Plc (BPP), the power generation arm of non-oil energy conglomerate Banpu, has acquired 2.5 billion baht worth of shares in Nakoso IGCC Management (Nimco), which owns the 543-megawatt Nakoso IGCC power plant in Japan’s Fukushima Prefecture, in a move that has been touted as seeking quick returns.
BPP was attracted to this brownfield investment as the facility is equipped with environmentally friendly integrated gasification combined cycle (IGCC) technology and is scheduled to start commercial operation this month, generating cash flow soon.
Revenue recognition is slated for the second quarter of this year. “The investment helps balance our power generation portfolio,” said BPP chief executive Kirana Limpaphayom. BPP acquired a 33.5% stake in Nimco, which owns a 40% share in the Nakoso IGCC power plant. The share transfer and joint venture agreement for Nimco between BPP and Mitsubishi Corporation Power Co (Japan) was held online recently.
BPP, which invested through its wholly owned Banpu Power Investment Co, now owns a 13.4% share in the Nakoso IGCC power plant. This acquisition adds 73MW of power generation capacity to BPP’s portfolio, calculated on its equity-based ownership.
Nakoso IGCC is the first and largest commercial-scale IGCC power plant to be owned by five joint venture partners, with Mitsubishi Corporation Power Co as the major developer. IGCC technology uses a gasifier to turn coal into gas as fuel. This technology enables Nakoso IGCC to generate more power per tonne of coal with low emissions. The power plant, which is the result of 30 years of research, will supply power to Japan’s grid under a long-term power purchase agreement and a long-term fuel supply agreement.
Mr Kirana said this investment is low risk because the long-term agreements are already in place. Each partner’s strengths, together with explicitly defined roles and responsibilities, have been applied to project management, he said.