Adaro?s Tanjung Power seeks $400m loans

Electricity firm PT Tanjung Power is seeking bank loans of up to US$400 million to help finance the development of a 2x100 MW coal fired power plant in Tabalong, South Kalimantan, Kontan reported on Wednesday.

Tanjung Power is a joint venture between PT Adaro Power and PT EWP Indonesia, a local subsidiary of Korea East-West Power Co Ltd. Adaro Power is a unit of IDX-listed coal giant PT Adaro Energy Tbk. Adaro controls a 60 percent stake in Tanjung Power.

The paper quoted Adaro Power President Director Mohammad Effendi as saying that the total investment requirement for the Tabalong power plant project is about $500 million, about $100 million to be financed by equity, with the rest to be financed via bank loans.

He said that finalization of the funding sources is expected to be made within the next 6-12 months to allow for the start of the construction of the plant that would take about 33 months.

Tanjung Power signed on October 15 a power purchase agreement with state-owned electricity firm PLN, under which the power producer will supply the electricity to PLN for customers in South and Central Kalimantan for 25 years. (*)