PLN hopes to raise $400m in loan from European banks

State-owned electricity company PT Perusahaan Listrik Negara (PLN) expects to raise up to US$400 million in loan from a syndication of European banks to partly finance the company?s 10,000 megawatt-coal fired power projects, Bisnis Indonesia reported on Thursday.

PLN?s president director Rudiantara said in Jakarta on Wednesday that the company would still need about US$1.6 billion to finance the massive power projects which would totally cost about $4.4 billion to build.

He said that of the $1.6 billion, about $400 million would be provided by a syndication of European banks, and the remaining $1.2 billion are expected from a syndication of Chinese banks.

According to Rudiantara, PLN and the European banks met last month to discuss the loan interest rate, the maturity and its grace period. He hoped that the global financial crisis which also hit many banks in Europe would not affect the loan disbursement.

?We are optimistic that the loan could be soon disbursed according to the initial agreement. But, we are also realistic about the liquidity problem resulting from the financial crisis,? he said.

PLN is currently building at least 10 coal-fired power plants in Java and another 25 similar plants outside as part of the company?s fast track program to provide additional power supply of about 10,000 megawatt by 2009-2010. (*)