Sarulla consortium seeking loan from Iceland
Monday, September 24 2007 - 02:29 AM WIB
A consortium made up of JSX-listed energy firm PT Medco Energi International, Ormat International Inc and Itochu Corp. is seeking additional loan from Iceland to fund the construction of the 3x110 MW Sarulla geothermal power plant in North Sumatra, Bisnis Indonesia
Medco Power’s president director Fazil Alfitri said in
“Icelandic banking sector is more experienced in funding the construction of geothermal power plant projects compared to those from other countries. That’s why we select the bank sector from the country (Iceland),” he said.
The loan's interest rate set by Icelandic banks is lower compared to the one set by banks in other countries because Icelandic banking sector understand the financial risk of funding the construction of geothermal power plant projects, he said.
The construction of the Sarulla geothermal power plant project needs an investment of US$600 million. Of the total, 70 percent will be financed with banking loan. The remainder will be sourced from the consortium’s internal funds.
Medco’s CEO Hilmi Panigoro said in August 2007 that the consortium had started talks with Japanese financing firm JBIC, but he did not specify the amount of loan the consortium was seeking to raise from JBIC.
The Sarulla Geothermal Project will be constructed over the next five years in 3 phases of 110 to 120 MW each. The first power generating unit is expected to be operating within 30 months after the financial closing, while the remaining two units are scheduled to commence operation over a period of 18 months following the first unit. The power to be delivered to the project will serve as the base load of PLN’s
The construction of the Sarulla geothermal power plant is targeted to be completed in 2010. Under the 30-year contract, PLN will buy power from the power plant at 4.64 U.S. cent per kilowatt hour. (*)