French, HK banks offer to finance 10,000 megawatt project
Tuesday, July 10 2007 - 01:38 AM WIB
Two foreign banks respectively based in France and Hong Kong have voiced their interest in financing the 10,000 megawatt power plant project to substitute financing from Chinese banking firms.
“We received bid from foreign banks, namely Hong Kong Shanghai Banking Corporation (HSBC) and a French bank, said Eddie Widiono, President Director of state owned electricity firm PT Perusahaan Listrik Negara (PLN), in Jakarta on Monday.
The two banks are ready to provide loans without guarantee from the government. They offered soft loans but the interest might be higher than the interest demanded by Chinese banks, he went on.
Meanwhile, Director General of Electricity and Energy Utilization at the Ministry of Energy and Mineral Resources J Purwono said the government had asked PLN to look for cheapest alternative funds for the project in case it failed to get funds from China.
He said Chinese banks whiich had promised to provide funds for the project were asking for guarantee from the Indonesian government for "all aspects", whereas the Ministry of Finance was only willing to gurantee "certain aspects".
He noted however that the agreement with China on the loan provision was now in the final phase of formulation.
"The Vice President has asked the Ministry of Finance to complete the negotiation on the gurantee within two weeks. Still, if the Chines banks and government refuse to finance the project, PLN has to do its utmost to look for alternative funds," Purwono said. (Godang)