UT expects financial closure for Tanjung Jati B expansion project mid this year
Tuesday, April 26 2016 - 03:22 AM WIB
IDX-listed heavy equipment and energy company PT United Tractors Tbk (UT) said that financial closure for the Tanjung Jati B coal-fired power plant unit 5 and 6 expansion project in Central Java is expected to be made in the middle of this year.
?We expect it (the financial closure) can be made in July of 2016,? said UT President Director, Gidion Hasan on Monday.
UT is a member of a consortium that includes Sumitomo Corporation and Kansai Electric Power Co assigned to develop the Tanjung Jati B coal-fired power plant unit 5 and 6, each with a capacity of 1,000 MW, in Central Java. The consortium in December of last year signed the power purchase agreement (PPA) with state-owned electricity firm PLN for the expansion project.
The financial closure will pave the way for the consortium to start construction of the project, located near the current unit 1-4, which is targeted to be completed in four years. ?So it is projected to start operation in 2020,? Gidion said. The Tanjung Jati B power plant currently has a combined installed capacity of 2,640 MW.
Gidion said the company will continue to seek for other power plant project opportunities in a bid to diversify revenue base amid the lingering drop in commodity prices.
UT Director Iwan Hadiantoro said that about 80 percent of funding for the estimated US$4 billion project will come from bank loans, with the remainder from equity. He added that the Japan Bank for International Cooperation (JBIC) is expected to take about half of the loan requirement, while the remainder to come from six other banks.
Editing by Reiner Simanjuntak