Govt agrees to extend deadline for Central Java mega power project
Friday, November 1 2013 - 02:45 AM WIB
IDX-listed coal giant PT Adaro Energy Tbk said that the government has agreed to extend the October 6th, 2013 deadline to achieve financial closure for the 2x1,000 MW coal-fired Central Java Power Project (CJPP).
A new Presidential Decree (Perpres No. 66/2013) has been formally issued, which officially enabled the extension of the deadline, the company said in a quarterly report obtained Friday.
?The US$4 billion CJPP is of great importance to its stakeholders and is of national significance. It is the first Public-Private Partnership (PPP) infrastructure project in Indonesia, and is also part of the Master Plan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) in that it will be the locomotive of growth in the Java Economic Corridor,? the statement explained.
Adaro said the CJPP has been faced with delays particularly due to tough challenges in completing land acquisition, which in turn has hampered efforts to conclude deals with the banks.
?However, due to the good efforts from Adaro and its partners and the support of other related stakeholders, the CJPP has made good progress, including acquiring more than 85 percent of the power block land as well as receiving the approval for Environmental Impact Assessment (AMDAL). Adaro and its partners will continue to work hard and are optimistic of successfully developing the project,? the company said.
Adaro is teaming up with two Japanese investors J-Power and Itochu Corp to develop the giant power plant project in Batang, Central Java, through a joint venture called PT Bhimasena Power Indonesia. J-Power and Itochu have 34 percent stake each in the joint venture, with the remaining 32 percent is held by Adaro.
The power plant, one of the largest in the country, was initially scheduled for completion in 2016. The late start of construction will delay the commercial operation of the power plant to 2017, a Japanese official said last month.
Editing by Reiner Simanjuntak