Chandra Asri Investments 200 Million US Dollars In Krakatau Posco Energy

Photo: Doc. PT Chandra Asri Petrochemical Tbk

JAKARTA - PT Chandra Asri Petrochemical Tbk (Chandra Asri Group) announced a significant investment in the energy infrastructure sector through its majority owned subsidiary, PT Krakatau Daya Listrik (KDL).

The investment is divided into 2 stages with a value of up to 200 million US dollars. First, KDL will increase its ownership in PT Krakatau Posco Energy (KPE), a joint venture (JV) with POSCO, the world's leading steel maker, to 45 percent. Second, KDL will invest together according to its share ownership to support the KPE expansion plan in building a new power plant with a capacity of 200 megawatts (MW) after the Final Investment Decision (FID) was taken.

With a normal growth route, the total capacity of KDL power plants will increase to 300 MW, consisting of 120 MW of previously owned combined power plants plus 180 MW of their share ownership in KPE after the planned investment expansion (namely 45 percent of 400MW).

The Sale and Purchase Agreement was signed by Nandang Hariana, President Director of KDL and Lee Jeon Hyeok, Senior Executive Vice President of Posco International Corporation. KPE has been established since 2011 and supplies electricity to the iron and steel manufacturing plant owned by PT Krakatau Posco (KP), a company led by POSCO partnering with PT Krakatau Steel (Persero) Tbk, which is located in the heart of Indonesia's State City', Cilegon.

Currently, KPE has a power plant and supporting infrastructure utilities with a capacity of 200 MW operating using exhaust from KP and supported by a long-term full-term agreement contract that is valid until 2038.

Chandra Asri's President Director and CEO, Erwin Ciputra, said this transaction marks an important milestone in the expansion and growth of the collaboration between Chandra Asri and POSCO, supported by our belief in the strategic direction and growth potential of Krakatau Daya Listrik and Krakatau Posco Energi.

"This step strengthens our commitment to deepening strategic partnerships and strengthens our position as the main investor in the energy sector. We are pleased to be able to open a clear synergy that is reflected in the successful acquisition of Krakatau Daya Listrik by our subsidiary, PT. Chandra Daya Investasi (CDI) in February 2023, to grow and develop the power base of the Indonesian industry in Cilegon," he said in a written statement, Monday, June 12.

This structured, specific, and directed acquisition is supported by PT Bank Central Asia Tbk (BCA). This is part of the M & A Programmatic strategy of the Chandra Asri Group as an effort to expand and strengthen its infrastructure business with a series of bolt-on deals to provide stronger performance with smaller risks, take advantage of the Group's financial power and a solid reputation as a Growth Partner for world-class global companies.

The increase in KPE ownership by Chandra Asri serves to create a more active role for Companies in shaping Indonesia's energy landscape, especially through KPE which provides reliable and cost-effective energy solutions with minimal environmental impacts.

By combining their resources, expertise, and market knowledge, Chandra Asri and POSCO shareholders aim to encourage innovation, improve operational efficiency, and provide superior value to customers and stakeholders.