BlackGold, China Huadian, PLN form consortium for Riau power project
Monday, September 18 2017 - 02:17 AM WIB
SGX-listed coal firm BlackGold Natural Resources Limited said on Monday that, on 15 September 2017, it entered into a Heads of Agreement (HOA) with various parties to form a new consortium in relation to an ongoing cooperation project for the development, construction, operation and maintenance of a 2 x 300 MW coal-fired power plant (Riau-1 Project) in Indonesia?s Riau Province.
The company said in a statement that the consortium shall consist of BlackGold; China Huadian Engineering Co., Ltd (CHEC); PT Samantaka Batubara (PT SB), a subsidiary of BlackGold; PT Pembangkitan Jawa-Bali (PJB); and PT PLN Batubara (PLN BB). PJB and PLN BB are both wholly-owned subsidiaries of Indonesia?s state-owned electricity firm PT PLN.
The addition to the consortium of certain subsidiaries of PLN and the signing of the HOA follow earlier announcements made by the company on December 28, 2015 regarding BlackGold?s entry into a consortium agreement with CHEC for participation in a bid to provide electric power to PLN and on June 12, 2017 regarding BlackGold?s signing of a conditional term sheet with CHEC. The HOA supersedes both of these previous agreements.
BlackGold said pursuant to the HOA, upon the successful award of the Riau-1 Project by PLN to the consortium, the consortium will establish a joint venture company (NewCo), which will enter into the relevant power purchase agreement (PPA) with PLN and construct and commission the Riau-1 Project. It is anticipated that the company, CHEC and PJB (through its appointee and other PLN subsidiaries) will hold equity interests in NewCo.
Under the HOA, amongst others, PJB (through its appointee) shall be appointed as the project leader. CHEC shall secure lenders, on a best efforts basis, for the financing of the Riau-1 Project and will fulfil the technical criteria for the Riau-1 Project in accordance with a procurement document to be issued by PLN.
PT SB and PLN BB will jointly ensure the supply of coal from PT SB?s mining concession to the Riau-1 Project for the duration of the PPA.
Mr Philip Cecil Rickard, Chief Executive Officer of the Group, commented: ?The entrance of PJB into the consortium is a mark of endorsement by PLN. We are thrilled to be embarking on this ground-breaking collaboration with our strong, state-owned partners in our bid for the Riau-1 Project. BlackGold shall continue to focus on the prospect of supplying coal on a longterm basis to the Riau-1 Project over the duration of the PPA,? said Philip Cecil Rickard, CEO of BalckGold in the statement.
The Riau-1 Project is listed as one of the planned mine-mouth power plants in the 2017 National Electricity Supply Business Plan of PLN (RUPTL), with commercial operation date expected to start in 2020, BlackGold said.
Editing by Reiner Simanjuntak