Cirebon Electric Power on track for commercial operation next year

Independent Power Producer (IPP) PT Cirebon Electric Power (CEP) is on track to start commercial operation in November 2011 as 80 percent of its power plant construction has been completed, CEP Vice President Joseph Pangalila said.

CEP is constructing a 660 MW coal-fired power plant in Cirebon, West Java, and will sell the electricity to be generated by this plant to state-owned electricity company PT Perusahaan Listrik Negara (PLN) for 30 years.

"We've signed a Power Purchase Agreement (PPA) with PLN for 30 years at a price of 4.361 US cent per Kwh," he told Petromindo.Com in Jakarta on Wednesday.

He said that they had also secured 3 million tons per annum (MTPA) of coal supply, of which 2 MTPA from PT Kideco Jaya Agung and 1 MTPA from PT Adaro Indonesia. The coal contract will last for 15 years, he added.

On Monday, the Japan Bank for International Cooperation (JBIC) signed a project financing loan agreement with CEP to fund the Cirebon power plant project.

The loan totaling up to US$595 million will be provided in co-financing with private banks, including the Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Corporate Bank, Ltd., Sumitomo MitsuiBanking Corporation, the Tokyo Branch of ING Bank N.V., and the Export-Import Bank of Korea (Korea Eximbank). JBIC and Korea Eximbank provide a political risk guarantee for the co-financed portion, JBIC said in a statement.

CEP was established in April, 2007. Japanese giant firm Marubeni, Korean firm Komipo, Indonesian firm PT Tripatra Engineering and Korean firm Samtan own 32.5 percent, 27.5 percent, 20 percent and 20 percent of the firm respectively. (alex)