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Climate Change

Mitsui divests from Indonesian coal plant operator

Paiton Energy jettisoned in trading house's decarbonization push

Mitsui will sell its 45.5% stake in Paiton Energy to a subsidiary of Thai power producer Ratch Group. (Photo courtesy of Paiton Energy)

TOKYO -- Mitsui & Co. will sell off its entire interest in an operator of Indonesian coal-fired power plants, the Japanese trading house said Tuesday, part of efforts to shrink the carbon footprint in the company's portfolio.

Mitsui agreed to sell its 45.5% stake in Paiton Energy to RH International (Singapore), a subsidiary of Thai power producer Ratch Group. The deal includes a transfer of shares in two other affiliated businesses.

The transaction is set to close within the fiscal year ending March 2022. Mitsui expects to book a profit from the deal, whose value has not been disclosed.

Mitsui helped launch Paiton Energy with other partners in 1994 as the first major independent power producer in Asia. Paiton Energy now runs three coal-fired plants at the Paiton Power Complex in East Java.

The complex accounted for about half of Mitsui's holdings in coal plants, based on generating capacity, as of March. The sale to Ratch Group will cut the share of coal plants in Mitsui's power capacity profile to 11% from 18%.

Mitsui said in November it would negotiate sales of the trading house's interests in coal-fired plants, held in Indonesia, Malaysia, Morocco and China.

In the past, Mitsui promoted coal-fired plants under the banner of supporting developing economies. The trading house has reversed course in response to the global shift toward decarbonization.

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