French power giant EDF eyes Asian countries

French power giant EDF eyes Asian countries

SINGAPORE (Reuter): The world's biggest power company, Electricite de France, plans to leap into Asia over the next five years, spending US$1 billion on power stations and grids, its Southeast Asian representative said yesterday.

Pierre Moriette said state-owned EDF was considering a major investment in Indonesia and ventures in the Philippines and Thailand, plus previously announced projects in Laos and China.

"All over the world we are looking in five years at having something like two or three billion U.S. dollars invested," Moriette told Reuters in an interview.

"Asia is the fastest-growing area so some significant part of that total, say 30 to 50 percent, will be in Asia," Moriette said. "In China and the Southeast Asia region we would want up to about five percent of the electricity market."

A monopoly generator and distributor of electricity in France, EDF has used its position at the hub of Europe's transmission grids to become a major exporter of power to its neighbors.

But Moriette said the cash-rich utility needed to expand out of its traditional homeland if it is to make anything like "commercial" rates of return.

EDF is looking at projects worth up to US$1 billion in a range of Asian countries, each requiring an investment of US$100 million for about one third of the equity.

"The ideal maximum initial investment would be about US$100 million, representing about 30 percent of the equity. Assuming a rough 70-30 debt-to-equity ratio, that puts the total venture at about one billion US dollars," Moriette said.

EDF is looking closely at the planned privatization and break- up of Indonesian state-owned electricity company PT Perusahaan Listrik Negara (PLN) for just such an investment.

"I think we would be most interested in the transmission part (of PLN), to become a shareholder," he said. "We might want to get into it by taking about 15 percent, or more, if that would be acceptable."