SET-listed Electricity Generating Plc (Egco) has announced the acquisition of a 25% stake in Yunlin Holding GmbH to operate a 640-megawatt offshore wind power project in Taiwan.
President Jakgrich Pibulpairoj said Egco subsidiary Greenwing Energy BV entered into a share purchase agreement with Yunlin, owned by Taiwan Offshore Holding GmbH, on Dec 19.
Egco's board of directors approved the investment on Nov 22.
The transaction is expected to be completed in the first quarter of 2020, subject to finishing all closing conditions, including consent by Taiwanese authorities.
"This deal establishes a track record for expanding Egco's power generation portfolio in Asia-Pacific," Mr Jakgrich said.
Yunlin is a holding company that owns Yunneng Wind Power Co to operate the wind power project, located in the Taiwan Strait, eight kilometres from the west coast of Yunlin County.
The project has an overall area of 90 sq km.
Yunneng Wind Power entered into power purchase agreements (PPAs) with Taiwan Power Co in December 2018 for each of its two phases. Through the PPAs, the firm secured a 20-year feed-in tariff for the sale of electricity from the project.
Commissioning of the project will occur in phases. The 352MW first phase is scheduled for completion in the fourth quarter of 2020. The 255MW second phase is planned for completion in the third quarter of 2021.
Mr Jakgrich said Taiwan possesses high potential for investment and aims to be an avid supporter of renewable energy to meet lofty renewable energy targets.
The focus of the scheme emphasises onshore and offshore wind and solar projects with a target to achieve 20% of Taiwan's power generation from renewables by 2025.
"This investment represents a unique and important opportunity for Egco to expand its footprint in the new and growing renewable market in Asia-Pacific," Mr Jakgrich said. "The project is expected to support Egco's growth momentum and offer compelling long-term returns for shareholders."
Egco previously acquired a 43% stake in Thai Pipeline Network Co, a provider of oil pipeline transport services to the northeastern region and oil depot service, from Biggas Technology Co for 3 billion baht.
Mr Jakgrich said Egco has cash on hand for asset acquisition of 15 billion baht, excluding its capability to raise additional funds if there is a higher value than expected for other deals.