BlackGold, Huadian sign term sheet for Sumatra power plant project
Monday, June 12 2017 - 01:32 AM WIB
SGX-listed coal mining firm BlackGold Natural Resources Limited reported on Monday that its subsidiary PT Samantaka Batubara (SB) has on June 8, 2017 entered into a conditional term sheet with China Huadian Engineering Co., Ltd. for the formation of a new company to develop the proposed Riau-1 2 x 300 MW coal-fired power plant in Riau province.
The BlackGold and Huadian consortium has participated in a bidding process to provide electricity to state electricity company PT PLN (Persero).
Under the terms and conditions of the Term Sheet, amongst others:
(a) SB?s responsibilities include:(i) Obtaining all approvals, permits and licences from the Government of Indonesia required for the Project;(ii) Acquiring all the land required by the NewCo for the Project;
(iii) Arranging and guaranteeing the exclusive coal supply to the Project for 30 (thirty) years; and (iv) Negotiating and finalising the Power Purchase Agreement (PPA) with PLN.
(b) China Huadian shall be appointed as a contractor and its responsibilities include:(i) The engineering aspects of the Project including, but not limited to, the development, construction, operation and maintenance of the power plant;(ii) Securing lenders, on a best efforts basis, for the provision of credit, finance and other financial accommodation or facilities to the NewCo in connection with the financing of the development and completion of the Project; and (iii) Providing the necessary funds for the Project development cost account as well as providing the necessary guarantee that would be required by PT PLN from the time of the signing of the PPA to the time of the commercial operation date of the Project.
(c) The NewCo shall issue new shares which will be held by: i) BlackGold Group; ii) its potential third party affiliate(s) and/or working partner(s), if any; and iii) China Huadian, (together, the ?NewCo Shareholders?) in the proportion of 44%, 5% and 51% respectively.
(d) The NewCo Shareholders shall make capital contributions to the NewCo in proportion to their respective shareholdings in the NewCo, amounting to a total capital contribution that is equivalent to a maximum of 25% of the total cost of the Project.