PLN signs document for financing of PLTA Rajamandala
Thursday, August 21 2014 - 03:03 PM WIB
State owned electricity firm PT Perusahaan Listrik Negara (PLN) announced on Thursday it had signed the Statement on the Effectivity of Power Purchasing Agreeement (PPA) of the PLTA Rajamandala hydropower plant project in Cianjur regency, West Java.
The document was signed by PLN with the developer of the project, PT Rajamandala Electric Power (REP), on Aug. 19, 2014 following the financial closure of the project. The financial closure was marked by the first drawdown of loan for the project on Aug. 8, 2014.
The development of the 1x47 MW power plant is being financed through an International Project Financing scheme with the syndication of JBIC/Japan and Mizuho Bank Tokyo as lender and a 19-year tenor.
The financial closure was achieved without a Business Feasibility Gurantee (JKU) from the Indonesian government. Instead, REP got a guarantee letter from the Multilateral Investment Guarantee Agency (MIGA), a unit of the World Bank based in Washington DC, which provides investment insurance facility for the financing of the Rajamandala project.
"The use of financing scheme without a JKU from the government of Indonesia marks a signficant progress for the development of power plants in Indonesia.
"The use of such scheme indicates lenders' confidence in Indonesia's power sector has improved. While in the past, a direct involvement of the goverment was considered necessary, now it is no longer considered necessary. Going forward, such scheme is expected to be applied for electricity projects and power plant developtment can be accelerated," PLN's President Director Nur Pamudji said.
Nur said for the moment such scheme will be applied for projets worth around US$200 million. In the future, it may also be applied to more costly projects.
The PLTA Rajamandala is estimated to cost US$150 million. Lender has pledged to cover 75 percent of the project's costs, while the remaining 27 percent will be covered the project's developer. REP is 51 percent owned by Putra Indotenaga (51 percent) and 49 percent by KPIC Nederland. The project is expected to be completed within 33 months and to start commercial operation in May 2017.
PLTA Rajamandala will be built on Citarum river in Cihea village, Haurwangi district, Cianjur regency. The power plant will generate 181 Gigawatt hour (GWh) of power per year, equal to those produced using using 70 million liters of oil fuels.
Editing by Johannes Simbolon