SET-listed BCPG Plc, the power arm of Bangchak Petroleum Plc (BCP), will acquire a 40% stake in Petro Wind Energy Inc (PWEI) in the Philippines in a bid to expand renewable power generation to 1,000 megawatts by 2020.
President and chief executive Bundit Sapianchai said the company signed a legally binding term sheet with CAIF III Pte Ltd, the seller, to acquire the PWEI stake.
PWEI is a major player in wind energy in the Philippines, owning a 36MW wind farm that is operational and 14MW still in development.
The project is located in Nabas, Western Visayas.
Mr Bundit said the price of the share acquisition could not be revealed because it is under negotiation.
The transaction was made through the acquisition of entire interests in CapAsia Asean Wind Holdings Cooperatief UA and is expected to be completed within the first quarter.
The acquisition of PWEI will enable BCPG to expect profit from the investment from this year onwards.
The PWEI wind energy business has a power purchasing agreement to sell power with a feed-in tariff of 7.40 peso per kilowatt house (unit), or around 5.4 baht per kilowatt hour, for 20 years.
The project was granted an investment privilege of a seven-year tax exemption from the Philippine authority.
Through this transaction, BCPG has formed a partnership with the dominant group of companies in the Philippines, whose businesses include banks, insurance, education, real estate and construction.
The partners aim to join hands in developing renewable power plants in Southeast Asia.
The acquisition of the wind power business in the Philippines reinforces BCPG's commitment to seeking expansion into other forms of renewable energy, in addition to solar power, which is its major renewable power source.
At the end of last year, BCPG's capacity totalled 206MW in Thailand and Japan.
BCPG shares closed yesterday on the Stock Exchange of Thailand at 13.90 baht, up 30 satang, in trade worth 195.6 million baht.