Seven local banks finance PLTU Riau

Seven regional government-owned banks and one state-owned firm have agreed to provide syndicated loans for state owned electricity firm PT Perusahaan Listrik Negara (PLN) (Persero) for the development of the 2x1110 MW PLTU Riau coal fired power plant in Riau Province, PLN said in a statement on Thursday.

The syndicated loan agreement was signed on Thursday by PLN?s President Director Sofyan Basir together with the representatives of each of the syndicated loan providers.

The seven banks are Bank DKI, Bank Jateng, Bank Aceh, Bank Kalteng, Bank Riau Kepri, Bank Kalbar, Bank Pembangunan Daerah (BPD) Bali. Also paritcipating in the syndicated loan is PT Sarana Multi Infrastruktur (Persero) (PT SMI), a state owned firm. They are all coordinated by the Ministry of Finance.

PLTU Riau is part of the 10,000 MW First Phase Power Development Program, which was launched in 2006. In fact, it is the last project of the program which has yet to start development due to the lack of financing, according to PLN.

The syndicated loan total a maximum of Rp 2.225 trillion with a tenor of 10 years.

Director General of State Asset Management at the Ministry of Finance Vincentius Sonny Loho said the government provides full guarantee for the repayment of the loan.

The power plant will be built by PT Rekayasa Industri and Hubei Hongyuan Power Engineering. It will much help improve power supplies in Riau, which now has to import 137 MW of power from outside the province. Peak load in the province reaches 510.4 MW, while the local power plants can only produce 373.4 MW. Electrification ratio in the province is 87.83 percent as of September 2015.

Editing by Johannes Simbolon