Posted by: mel | October 14, 2009

Indonesia power firm signs loan agreements for over $1 bln

Reuters | Jakarta | 14 October 2009

Indonesia’s state electricity firm PT Perusahaan Listrik Negara (PLN) has raised more than $1 billion from a group of banks as part of the financing for its fast track power projects, a PLN official said on Wednesday.

PLN previously said it needed to raise a total of $8 billion to finance the first phase of the government’s crash programme, which will add 10,000 megawatts with the construction of several coal-fired power plants. So far, it has raised over $6 billion, with most of the funding from Chinese banks.

On Wednesday, PLN signed two loan agreements with China Development Bank, a $625 million loan for a 660-MW coal-fired power plant in Central Java and a $138 million loan for a 224-MW plant in West Sumatra.

PLN also signed an agreement for a $329 million loan with a consortium of domestic banks, including from BRI (BBRI.JK), Bank Mandiri (BMRI.JK) and BNI (BBNI.JK).

“PLN still needs about $400 more in foreign exchange and about 2 trillion rupiah ($213.6 million) to finance the rest of the 10,000 MW projects,” PLN’s president director, Fahmi Mochtar, told reporters. He declined to give details of the loan terms.

President Susilo Bambang Yudhoyono, who won a second, five-year term in July, has pushed the crash programme to resolve power shortages. The government also plans to build a second phase of 10,000 MW power plants, using coal and renewable energy such as geothermal.

Mochtar said some of the first phase of the coal-fired power plants, especially in Java island, will be in operation by the end of this year.

These include Rembang power plant in Central Java, with two units of 315 MW capacity, Labuan plant in Banten province, western Java, with two units of 300 MW capacity, and Indramayu in West Java province, with three units of 350 MW capacity.

Originally, phase one was due to be completed next year, but because of difficulties in obtaining funds, completion has been postponed to 2011.

PLN has 25,000 MW of generating capacity but daily output is far less because most of its plants are old and inefficient. Industry officials forecast Indonesia’s power demand will grow around 10 percent a year. ($1=9,365 Rupiah) (Reporting by Muklis Ali; Editing by Sara Webb)

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