Bank Mandiri delays loan disbursement for Cilacap

Bank Mandiri has not decided whether or not it will fulfill its commitment to provide loan worth US$100 million to help finance the construction of a steam power plant which is now under construction in Karangkandiri, Cilacap, West Java, Kompas reported on Saturday.

The delay in the disbursement of the loan from the bank was unveiled by State Minister of State Owned Enterprises Sugiharto during the installation of a steam turbine at the power plant on Friday.

"I will soon ask Bank Mandiri management about the delay," the minister said, adding that the delay in the loan disbursement from the state owned bank would affect the project, which has been 61.9 percent completed. The power plant was expected to start operation next year.

The Karangkandiri power plant, which will have a capacity of 2 x 300 MW is owned by state owned electricity company PLN. In addition to Bank Mandiri, Bank BNI has also committed to provide loan for the construction of the power project which will cost about US$510 million. But unlike Bank Mandiri, BNI has begun the disbursement of the loan for the project.

Sugiharto rejected the speculation that the disbursement of the loan had been delayed due to Bank Mandiri's bad debt problem. "There is no relevancy between the bad debts and the power project," he said. (*)