Bank Mandiri to provide Rp 3 trillion for power plant projects

State-owned Bank Mandiri will allocate loans of about Rp 3 trillion this year for partly financing power plants to be built by state-owned electricity company Perusahaan Listrik Negara (PLN).

The bank's director Abdul Rachman said in Jakarta on Thursday that the credits which would also be used to finance the conversion of PLN's diesel-fired power plants into coal fired power plants would be disbursed according the electricity company's needs.

"We have discussed the financing for the power plants. Now, we are waiting for PLN's preparation to disburse the funds," he was quoted as saying by Bisnis Indonesia.

PLN's chief commissioner Alhilal Hamdi said earlier that PLN would need at least Rp 3 trillion in loans from local banks to partly finance its power projects to be built under the so called fast-track program.

Besides raising loans from the local banks, PLN would also issue bonds to finance the power projects.

In addition to Bank Mandiri, other local banks will also take part in financing the power projects. BNI, BRI and Bukopin early this week agreed to provide a syndicated loan of US$96.99 million to partly finance the construction of the coal-fired power plant 2x55 MW-Tanjung Kasam in Batam.

The plant is owned by local company PT. Tanjung Kasam Power. The power plant will be constructed by China?s Dong Fang Electric Corporation, which won the engineering, procurement and construction contract (EPC) of the US$96.99 million power plant. (*)