Timah seeks bank loans to finance power project

IDX-listed tin giant PT Timah Tbk will seek bank loans to help finance the development a 2x150 MW coal-fired power plant in South Sumatra, Kontan reported on Saturday.

The paper quoted Timah Corporate Secretary Agung Nugroho as saying that the company will turn into project financing scheme, under which about 70 percent of the financing for the Rp 1 trillion power plant project will come from bank loans and another 30 percent from equity. ?To get funding access from banks will be quite easy. Currently, we?re focused on the licensing (for the project),? he said.

Timah is teaming up with state-controlled construction firm PT Adhi Karya Tbk in the power plant project to be located at its coal concession in Muara Enim, South Sumatra in which the tin firm holds a 51 percent, stake while the construction firm 49 percent.

The electricity output will be distributed to Timah?s tin industry in Bangka Belitung, while the excess will be sold to state-owned electricity firm PT PLN. The entry into power generation forms part of Timah?s diversification strategy. (*)