Financial close of Tanjug Jati B project concluded

By Thomas Sembiring

Petromindo|Thomas

Required funding for the Tanjung Jati B coal-fired power plant expansion project with capacity of 2x1,000 MW in Central Java has been secured after the consortium developing the project reached financial close with lenders at the end of last month.

?The consortium made the financial close on March 31, 2017,? said Gideon Hasan, President Director of IDX-listed heavy equipment and mining firm PT United Tractors Tbk, a member of the consortium.

He added investment for the project is estimated at between US$4 billion and $4.2 billion.

A consortium called PT Bhumi Jati Power (BJP) is developing the project. Other members of the consortium are Sumitomo Corp and Kansai Electric Co which in December of 2015 signed the power purchase agreement (PPA) with state-owned electricity firm PT PLN, under which the latter will purchase the electricity output from the Tanjung Jati B expansion project for 25 years.

Lenders, which were expected to provide a total funding of $3.35 billion, included Japan Bank for International Cooperation (JBIC) Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mitsubishi UFJ Trust and Banking Corporation, The Norinchukin Bank and Singapore's Oversea-Chinese Banking Corporation Limited. Nippon Export and Investment Insurance (NEXI) provides insurance for the part of this loan provided by private-sector financial institutions.

PLN said last month that the first unit of 1,000 MW of the Tanjung Jati B expansion project is expected to be completed in 50 months after the financial close, and the second unit of another 1,000 MW in 54 months. The project is expected to be in full operation in second semester of 2021.

Editing by Reiner Simanjuntak