WB signs $141m loan facility to finance Java-Bali power development project

The World Bank signed an agreement with the government of Indonesia on Wednesday to provide US$242.6 million in loan facility for the country, a joined statement said.

Some $141 million of the loans would be used to help finance the development of the Java-Bali power sector project. The loan carriers an interest rate of 2.5 percent and payable in 20 years.

?The Java-Bali Power Sector Restructuring and Strengthening Project supports the state power company?s (PLN) efforts to implement its financial and corporate restructuring plan; as well as assisting the state gas company (PGN) to prepare the groundwork for a more efficient structuring of its gas transmission and distribution operations, given the importance of natural gas for power generation,? said the statement.

The following is details of the loan project:
1) The Project will support PLN's initiatives to (a) achieve greater utilization of existing generation capacity on Java-Bali, (b) improve the security of supply to the cities of Cirebon and Surabaya, and (c) debottleneck local interconnections between bulk transmission and subtransmission.
2) The Project will support PLN's initiatives to (a) provide a level of security commensurate with the existing and potential PLN and PP geothermal generation capacity evacuated through the West Java 150kV subtransmission network near Bandung, (b) improve security of supply to Surabaya, and (c) relieve multiple localized overloading and voltage problems at subtransmission level.
3) The Project will support PLN to implement a pilot rollout of the company's Enterprise Resource Planning (ERP) information system.
4) The Project will also support PLN's restructuring program-as well as its institutional strengthening initiatives-through technical assistance.
5) The Project will support PGN's restructuring and institutional strengthening initiatives, through technical assistance. (robert)