PLN: Financial close of Tanjung Jati B project expected this month
Tuesday, March 28 2017 - 03:54 AM WIB
Financial close of the Tanjung Jati B coal-fired power plant expansion project with capacity of 2x1,000 MW in Central Java is expected to be made at the end of this month, according to President Director of state-owned electricity firm PT PLN Sofyan Basir.
Sofyan made the statement on Monday following the signing of a guarantee document by PLN and PT Bhumi Jati Power (BJP), the developer of the project which is also known as PLTU Java-4 project, in Tokyo.
He explained that the signing of the document forms part of a pre-financial close stage to help ensure funding for the project can be signed this month. ?PLN and BJP are expected to be able to accelerate the financial close proses from the initial schedule of June 7, 2017 to March 31, 2017,? he said in a statement.
BJP is a consortium comprising of IDX-listed heavy equipment and mining firm PT United Tractors Tbk, Sumitomo Corp and Kansai Electric Co, which in December of 2015 signed the power purchase agreement (PPA) with PLN, under which the latter will purchase the electricity output from the Tanjung Jati B expansion project for 25 years.
Investment requirement for the project is estimated at US$3.35 billion. Japan Bank for International Cooperation (JBIC) said earlier it had on February 24 signed a loan agreement for project finance with BJP worth $1.68 billion. This is part of a co-financing deal participated in by Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mitsubishi UFJ Trust and Banking Corporation, The Norinchukin Bank and Singapore's Oversea-Chinese Banking Corporation Limited, with a total co-financing amount of approximately $3,355 million. Nippon Export and Investment Insurance (NEXI) provides insurance for the part of this loan provided by private-sector financial institutions.
Elsewhere, PLN said that the first unit of 1,000 MW of the Tanjung Jati B expansion project is expected to be completed in 50 months after the financial close, and the second unit of another 1,000 MW in 54 months. The project is expected to be in full operation in second semester of 2021.
Editing by Reiner Simanjuntak