International Power signs financing for Paiton 3 Plant Expansion

UK power firm International Power plc announced on Monday that PT Paiton Energy has signed the financing for the new 815MW, coal-fired Paiton 3 plant in East Java.

The total project cost is estimated to be US$1,519 million, which will be funded by a mix of debt and equity in an 80:20 ratio. International Power's equity investment of US$123 million will be funded from current liquid resources.

The financing package is provided under the JBIC Overseas Investment Loan programme and comprises 17‑year non-recourse loans denominated in US dollars and Japanese yen.

JBIC is providing direct loans totalling US$729 million equivalent, and commercial banks are providing a US$486 million equivalent loan, which is covered by an extended political risk guarantee from JBIC. The commercial bank loan is being provided by Bank of Tokyo Mitsubishi UFJ, Mizuho, Sumitomo Mitsui Banking Corporation, BNP Paribas, ING, Cr?dit Agricole, HSBC and Sumitomo Trust.

Philip Cox, Chief Executive of International Power, said, "This expansion will provide much needed additional capacity on the key Java-Bali grid and we are pleased to have secured non-recourse finance, on attractive terms, for this high quality project. Paiton 3 will add to our long-term contracted earnings stream and demonstrates our ability to realise additional value from existing sites."

The Paiton 3 project comprises a single 815MW coal-fired unit, which will be located within the existing Paiton complex. The project is being constructed under a fixed-price contract with Mitsubishi Heavy Industries, Ltd. of Japan, the main equipment supplier. It is expected to be fully operational in 2012 and has a 30-year PPA with PT PLN (Persero), the Indonesian state utility. The plant will be operated by PT IPMOMI, the operator for the existing Paiton plant, in which International Power has a 59.5% interest.

PT Paiton Energy, the project company for the existing operational 1,365MW coal-fired plant at Paiton, is owned by International Power 40.5%, Mitsui 40.5%, Tokyo Electric Power (TEPCO) 14%, and local Indonesian company, PT BHP 5%.

PT IPMOMI, is owned by International Power 59.5%*, Mitsui 25.5%*, TEPCO 15%. (alex)