Chinese bank refuses to finance Kasem power project
Monday, August 15 2005 - 01:57 AM WIB
The Industrial and Commercial Bank of China (ICBC) has turned down the offer to finance the construction of the US$150 million power project in Kasem, Batam as the government refused to guarantee the bank's loans for the project, Bisnis Indonesia daily reported on Monday.
"We have to find new investors to finance the project," said Eri Ifyandri, the president of PLN Batam, the subsidiary of the state owned electricity company PLN in Batam.
Chinese company Dong Feng Electric Ltd won the tender in late 2004 to build the Kasem power plant. The company had agreed to cooperate with the ICBC to provide the loans for the construction of the plant.
Eri, however, said that the bank backed out of its plan to finance the project because the government would no longer guarantee commercial loans raised by state owned companies from foreign banks. (*)