EWC gets $104m loan

Standard Chartered Bank and Mizuho Corporate Bank have closed syndication of a US$104 million financing of Energy World Corporation (EWC) Ltd's Sengkang power and gasfield project in South Sulawesi.

In a statement Monday, the banks said the financing involved the transfer of existing project finance loans for the 135-megawatt Sengkang independent power producer (IPP) and gasfield project from Standard Chartered and new funding for a 60-megawatt expansion of the project.

The expansion is at an advanced stage of construction and is expected to be commissioned before the end of 2008.

The statement said all output from the project is sold to Indonesia's state-owned electric utility, PLN, under a long-term power purchase agreement.

"The seven-year financing was signed in October 2007 and matures in October 2013. The financing was fully syndicated in mid-2008," it said.

Mandated lead arrangers Standard Chartered and Mizuho have been joined in the syndicate by KBC Bank NV Singapore Branch, Natixis and Nordkap Bank AG, as lead arrangers.

All the new funding is provided without political risk insurance cover although the project does benefit from an Indonesian government support letter for the PPA.

"The Sengkang IPP project is the first gas-fired IPP project in Indonesia and we are very pleased to have five quality international banks in the Sengkang project financing and appreciate the confidence they have placed in EWC," said EWC managing director, Stewart Elliott.

Standard Chartered Bank's head of project finance, Conor McCoole, said this was the first time in more than a decade that a syndicate of international banks has provided uncovered financing to a private power project in Indonesia.

"Despite the challenging credit markets, it is positive that quality projects such as Sengkang have managed to secure long-term financing," he said.

Standard Chartered Bank acted as financial adviser to EWC for the transaction.(*)