JBIC to provide $980 million loan to Tanjung Jati A power plant

The consortium of Tanjung Jati A has received a US$980 million commitment from the Japan Bank for International Cooperation (JBIC) for building the $1.4 billion coal-fired Tanjung Jati A power plant, Bisnis Indonesia reported Tuesday.

Tanjung Jati A president director Ambono Janurianto said that the JBIC is ready to finance the building of 2x660 megawatt (MW) coal-fired power plant. The company has set a target to finish the construction work in 2012 and the plant would be relocated to Cirebon in West Java from the southern part of Java.

?In terms of indication, JBIC is ready to finance Tanjung Jati A because we will use machines and equipment from Japan. We will work with Toyota Tsusho, Tomen Power Corporation, International Power and Maharani Group,? Ambono told the Bisnis on Monday in Jakarta.

Ambono explained that 70 percent of the funding for Tanjung Jati A power plant will come from the commercial loans from the bank, JBIC, and the rest will be from the consortium.

Regarding the power sale price, initially Bakrie Power, a member of the consortium that owns the project, proposed 5.7 U.S. cents per kWh. In the renegotiation, Bakrie offered its revised power sale price at 4.8 cents per kWh and the final revised price it offered was 4.5 cents per kWh.

Earlier, PLN?s director for power and primary energy Ali Herman Ibrahim said that the power sale price offered by the consortium should be lower than 4.5 cents per kWh.

Ambono admitted that the company?s offered price was higher due to the fact that the engineering, procurement and construction materials were very expensive.

Tanjung Jati Corp., the operator of Tanjung Jati A power plant is jointly established by PT Bakrie Power, Tomen Power Corporation, International Power and local firm Maharani Group. PT Bakrie Power, a subsidiary of Bakrie Group, owns 20 percent stake in Tanjung Jati Corp. (*)