Adaro, Shenhua team up to develop 600 MW power plant
Tuesday, November 25 2014 - 12:37 AM WIB
IDX-listed coal mining giant PT Adaro Energy Tbk announce on Monday that its subsidiaries PT Adaro Power (AP) and PT Bhakti Energi Persada (BEP) have signed a Memorandum of Understanding (MoU) with Chinese firm China Shenhua Overseas Development and Investment Co. Ltd, to develop a mine mouth coal-fired power plant in East Kalimantan.
AP is wholly owned by the firm, while BEP is controlled by the firm.
The MoU was signed on Nov. 21, 2014 by AP?s President Director Mohammad Effendi and Director Kee Cheng Chye, Chairman of Shenhua Overseas Development and Investment Co., Ltd., and BEP?s President Director Jeffrey Mulyono and Director Crescento Hermawan in Jakarta.
The parties intend to establish a joint venture in Indonesia to develop a mine mouth coal fired power plants (MM-CFPP), which will likely be owned 51 percent by Shenhua Overseas and 49 percent by AP.
?As per the company?s standard strategy when investing in power, the intention is to finance the power project using project financing, whereby a significant amount of the total project investments will be funded with non-recourse project debt financing,? the firm said.
In the first stage, Shenhua Overseas and AP agree to mine sufficient coal for, and to develop, a 2x300 megawatts (MW) MM-CFPP, and power transmission facilities. The long term power capacity is expected to be expanded in line with growth of power demand. The electricity shall be provided by integrated transmission to the Kaltim-Kalsel-Kalteng grid.
This cooperation between Shenhua Overseas and the company to develop MM-CFPP in Indonesia is a manifestation of the strategic intention of the government of the Republic of Indonesia to build 35 gigawatts (GW) of power plants in the next five years, most of which will be coal-fired power plants. The MM-CFPP will use low heat value coal. This is also in line with the Government?s policy of obtaining value from low heat value coal.
The company?s President Director, Garibaldi Thohir, said ?Adaro Energy will contribute to the generation of high quality and affordable electricity for Kalimantan. Together with Shenhua we will create maximum value from Indonesian coal, including boosting the economic development in Kalimantan and so contribute to national development. With this MoU, we remain on track to further develop Adaro Energy?s power division.?
Editing by Johannes Simbolon