Eksploitasi says power projects terminated due to rupiah depreciation
Wednesday, July 12 2017 - 01:08 AM WIB
Petromindo
IDX-listed coal mining firm PT Exploitasi Energi Indonesia Tbk said that power purchase agreements (PPAs) on two coal-fired power plant (PLTU) projects in Riau was terminated last year due to sharp depreciation in the value of the rupiah against the US dollar, causing the investment cost to escalate.
?Obstacle faced by the company in completing the two PLTUs was the increase in investment following the depreciation of the rupiah against the US dollar. Due to the excessive cost overrun, the bank considered the investment to be no longer feasible. The bank then suspended the loan, and asked the company to increase its equity portion,? Exploitasi said in a statement on Tuesday in response to queries made by the Indonesia Stock Exchange.
The company announced in January of this year that the PPAs on the two PLTU projects in Tembilahan and Rengat, each with capacity of 2x7 MW, had been suspended late in 2016 by PLN as the company could not be able to complete the projects as scheduled following suspension of loan by Bank Rakyat Indonesia in the wake of the escalating investment cost as imported equipment became more expensive with the drop of the rupiah.
The company said that following the termination of the power plant projects, it will now focus on supplying coal for PLN power plants.
Regarding the PLTU Tembilahan and PLTU Rengat assets, estimated to worth around Rp 205.84 billion, the company said that part of it will be used as back-up for the PLTU Pangkalan Bun. Exploitasi is also considering to use part of the equipment for possible new PLTU project in partnership with other investor.
Editing by Reiner Simanjuntak