Egco expands its portfolio in Indonesia

  ELECTRICITY GENERATING (Egco) yesterday announced its acquisition of Chevron’s geothermal power business in Indonesia.
Egco president Chanin Chaonirattisai said an affiliate of Egco Group, Star Energy Group Holdings, and AC Energy Holdings had entered share sales and purchase agreements to acquire Chevron’s geothermal operation last Thursday.
Egco’s Indonesian acquisition is part of a deal led by Philippine conglomerate Ayala Corporation (AC) that formed a consortium to buy Chevron’s entire geothermal business in the Philippines and Indonesia. 
The Indonesian consortium consists of AC Energy, which holds a 19.8-per-cent economic stake, Star Energy Group Holdings, Star Energy Geothermal and Egco. 
The Indonesian consortium’s acquisition will be made through their joint-venture company Star Energy Geothermal (Salak-Darajat) BV.
The Philippine consortium consists of AC Energy and Star Energy Group Holdings. The acquisition will be made through the group’s joint-venture company Acehi-Star Holdings. 
In the Philippines, company subsidiaries have a 40-per-cent equity interest in the Philippine Geothermal Production Co, which operates the Tiwi and Mak-Ban geothermal field in southern Luzon and supplies steam to power plants with a combined nameplate capacity of around 700 megawatts.
The value of the acquisitions was not revealed but earlier reports suggested the value of the Chevron’s assets at about US$3 billion (Bt108 billion). 
Clifford Chance Pte Ltd acted as the lead transaction counsel to the consortium. Credit Suisse acted as the sole financial adviser and joint financier to the consortium. BPI and DBS acted as lead coordinators for the debt financing.
Chanin said Egco Group would acquire a 20.07-per-cent indirect ownership interest in the Project via Egco’s subsidiary at 11.89 per cent and Star Energy Geothermal at 8.18 per cent. 
The share transfer is expected to be completed in the first quarter of 2017, subject to relevant approvals and satisfaction of agreed conditions under the agreement.
Chevron’s Indonesian assets consist of the Salak and Darajat geothermal power plants in West Java province, with the aggregate capacity of 402MW of electricity and 235MW equivalent of steam. 
The power plants have secured long-term energy sales contracts with PLN, the Indonesian government-owned electricity corporation.
“The acquisition fulfils our business plan in enhancing Egco Group’s presence in Indonesia [where] we have existing business, and in line with our strategic direction to pursue investment opportunities in the Asia-Pacific region,” Chanin said. 
Egco Group started its investment in Indonesia in 2014 by holding a 20-per-cent indirect ownership interest in the Star Energy geothermal power plant, which has a total installed capacity of 227MW.