Government and JBIC agree on Tanjung Jati B financing

Ministry of Finance on the behalf of the Indonesian government, and Japan Bank for International Cooperation together with Nippon Export and Investment Insurance have reached an agreement on the financing of the Tanjung Jati B power plant, Bisnis Indonesia reported on Wednesday.

"We and JBIC have reached an agreement, and are now waiting for the signing of the financing agreement between PLN and PT Central Java Power and an escrow agreement between PLN and appointed escrow agents," Minister of Finance Budiono told reporters on Tuesday. He said that PLN had promised that all these agreements would be finalized within the next two weeks.

President Megawati agreed early this year to resume the development of the Tanjung Jati power plant which was delayed during the peak of the country?s economic crisis in 1998. The plant which will have a generating capacity of 1,320 megawatt has been scheduled for completion in 2005 but due to the delay in the signing of the agreement, the completion of the project has been rescheduled in 2006.

The power project will cost about US$1.6 billion. Sumitomo Corp, which will develop the power plant under build, lease and transfer contract, combined with profit sharing scheme, has agreed to provide $550 million while the main creditor JBIC will give the remaining $1.1 billion. (*)