In the 1990s, Mitsui embarked on a major change to its business model, shifting from trading toward investment. Paiton, a group of coal-fired power stations in Indonesia operative since 1999, neatly epitomizes that shift. Mitsui had been selling Japanese-made power-generation equipment to foreign countries, but in the 1990s it decided to deepen its involvement by building, owning and operating a power station of its own—such was the origin of Paiton.
Today, Mitsui is a major sponsor of Paiton Energy, an independent power producer (IPP refers to a power producer that is not a public utility) in Indonesia, which has three coal-fired power generation units at Paiton: Paiton I, two units with a combined capacity of 1,230 megawatts, and Paiton III, one unit with a capacity of 815 megawatts. Together they provide about 10% of the total electricity demand of the island of Java with its population of 140 million people. Power generation has grown to become one of Mitsui’s core business fields.
The road to success, however, was anything but smooth. When the project was launched in the early 1990s, Paiton was going to be the first-ever IPP in Asia. To tackle this challenge, Mitsui put together a multinational blue-chip consortium consisting of Edison Mission Energy, then the world’s largest IPP; GE Capital, the finance arm of General Electric, and thus was able to provide both finance and power-generating equipment, together with a local shareholder company.