DH Energy?s funding snag continues

By Rikordias D. Siahaan

Sumsel 6 Mine Mouth Project operator PT DH Energy is still experiencing financing difficulties to start developing its 600MW power plant in Pendopo, Muara Enim, South Sumatra.

Since winning the Sumsel 6 project in February last year, DH Energy and its Korean partner Posco are still struggling to secure the financing for the project which is estimated to cost US$1 billion. The coal mines-supplying the plant is owned by PT Pendopo Energi Batubara, a subsidiary fully owned by DH Energy.

The mine covers 17,840 hectares area having 2.2 billion tons of coal resources and 700 million tons of coal reserves at stripping ratio of 1 metric ton to 1.6 cubic meters as per JORC standard. The company holds 3rd generation Coal Contract of Work (CCoW) coal mining license.

?Government guarantee turns out to be a very crucial factor in our project since export credit agencies requested assurance from central government for the project,? Ayu Saptarika told petromindo.com explaining the main reason of why the project is still motionless.

The company actually had been involved in several negotiations with a few export credit agencies and a few commercial banks. However, the negotiations had failed due largely to the absence of such guarantee.

Editing by Dadan Wijaksana