PII to guarantee PLTU Jateng power project for 21 years
Monday, September 26 2011 - 03:19 AM WIB
Under the guarantee agreement signed in Jakarta on last week, PII will provide financial guarantee if state owned electricity company PT Perusahaan Listrik Negara (PLN) as the buyer fails to fulfill its financial obligation to investors and lenders of the project which is estimated to absorb Rp30 trillion (about US$3.42 billion) in investment.
PT PII Sintya Roesli said in Jakarta on Friday investors would receive a financial guarantee for 16 years while lenders would get 21 years. ?Lenders of the project will get 5 years longer,? he said.
If PLN failed to fulfill its financial obligations either to investors or lenders, PII and the Mnistry of Finance would be responsible to cover the required payments, he said, adding that the guarantee facility becomes effective immediately after the signing of the agreement. ?It however will be immediately revoked, if the investor fails to pay annual guarantee cost (premium).
PLTU Jateng, also called PLTU Central Java, one of large infrastructure projects to be developed under a public private partnership (PPP) scheme will be built under a build, operate and transfer contract scheme.
The construction of the power plant project which will have a capacity of 2 x 1,000 megawatt is scheduled for commercial operation in 2016. PLN has agreed to buy electricity from the independent power plant for 25 years.
PLN recently announced that a consortium of J-Powerand Itochu, both of Japan, and coal mner Adaro the winner of the project. The consortium offered to sell electricity company at a price of US$5.79 per kWh. (*)