Paiton Energy seeks loan to finance Indonesia power plant project

PT Paiton Energy Co., partly owned by Mitsui & Co. and Tokyo Electric Power Co., is seeking a loan to support its planned bid for a $1 billion coal power project in Indonesia , two bankers with knowledge of the matter said as reported by The Jakarta Post Wednesday.

 

Paiton Energy, which operates two coal-fired power units in East Java, Indonesia, will use the funds to build the 800 megawatt plant, said the bankers, who declined to be identified because the information is private.

 

The Indonesian government will by the end of the year choose between Paiton Energy and PT Jawa Power for the project, the bankers said. The nation is adding power capacity to meet rising energy needs after the economy expanded by 6.3 percent in the three months ended June 30, the fastest in more than two years.

 

``The power shortage of the country and the government commitment to resolve it should ensure a good regulatory environment for the independent power producers,'' said Mark Tan, who helps oversee about $3 billion in Asian equities at UOB Asset Management in Singapore. ``Moreover, with ample supply of coal in Indonesia, it should be quite cost competitive.''

 

Keizo Ogata, president director of Paiton, based in Jakarta, did not immediately return calls.

 

The Indonesian government plans to add 20,000 megawatts of generating capacity, mostly fired by coal, by 2010 to cut the cost of electricity currently generated by more expensive oil- fired plants. (*)