Development of Sumsel 7 mine-mouth power plant stalled

Development of 2x150MW IPP mine-mouth power plant in Musi Banyusain regency, South Sumatra, is stalled as Indian company Maduchon Group has thus far failed to provide equity financing for the project, a senior official of state electricity firm PT Perusahaan Listrik Negara (Persero) said.

Kompas daily reported PLN Director Bagiyo Riawan as saying that the Maduchon-led consortium is required to provide US$100 million equity financing out of $455 million funds needed to complete the project. The initial deadline for the consortium was set in May 2013, ?The failure to provide equity financing has caused consortium of lenders led by Bank Mandiri unwilling to disburse the loan,? he said.

The project, also known as Sumsel 7 power plant, is part of the 4,200MW mine-mouth power plants planned to be developed in coal-rich province of South Sumatra.

Maduchon-led consortium signed PPA for Sumsel 7 in 2012 with price of US 5.8099 cents per kwh. The project was initially scheduled to come onstream in 2016 or 36 months after financial close.

Kompas quoted a representative of Maduchon as saying that the company is in the process of selling assets in India to fulfil funding requirement, adding that the funds might be available in June this year. (*)