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Banpu Acquires 4 Combined Heat and Power Operations in North-Eastern China

Banpu Acquires 4 Combined Heat and Power Operations in North-Eastern China

Banpu Public Company Limited has acquired control of four combined heat and power (CHP) operations in north-eastern China. The deal establishes a solid platform for Banpu’s further growth in China including creation of further coal power synergy.

On February 9, 2006, Banpu Public Company Limited reported to the Stock Exchange of Thailand that Banpu, through its subsidiary company, Banpu Power Limited, signed an agreement, subject to certain conditions precedent, with Alliant Energy International Inc. (AEI), a listed company on the NYSE and a wholly-owned subsidiary of the US-based utility group, Alliant Energy Corporation, to acquire 90.9 percent of Peak Pacific Investment Co. Ltd (PPIC) and 100 percent of Interstate Energy Corporation Pte. Ltd.(IEC). Both PPIC and IEC were AEI’s international investment arms and are Singapore-registered companies. The total consideration is USD 84.3 million or BHT 3,372 million (Rate: USD 1 = THB 40).

Through the acquisition of PPIC and IEC, Banpu has obtained control of four CHP plants namely Zhengding and Luannan in Hebei province, Zouping in Shandong province and Bengbu in Anhui province. Total combined power generated from the four plants are 279 MW and 1,000 tph of steam.

Coal-fired CHP plants receive both preferential treatment and protection by related regulation on CHP plant. This includes designation of monopoly steam supply area and priority dispatch of electricity generated by the local grid company at higher market price once operating criteria on steam to power ratio is being met.

“The decision to invest in CHP plants is in line with Banpu’s strategy to strengthen Banpu’s business through geographical expansion into China. The target is to balance the coal and power investment in Thailand, Indonesia, and China by the year 2008.” said Mr. Chanin Vongkusolkit, CEO of Banpu.

All the acquired plants are coal-fired, with coal sourced from local mines or mines in neighboring provinces. Through its existing coalmining ventures in China or through the new coal investments, Banpu will gradually seek to develop vertical synergies with the power operations acquired.

“I would like to extend a very warm welcome to the management and operational teams at these plants. They have best practice standards in quality control, safety and environmental monitoring – all priority areas for Banpu. Importantly, they also bring to Banpu extensive local experience and know-how,” Mr. Chanin added.

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