JBIC says to sign $1.6 bln loan for Indonesian power projects

Reuters, Thu Nov 5, 2009 6:29am EST

JAKARTA, Nov 5 (Reuters) - Japan Bank for International Cooperation (JBIC) expects to sign loan agreements for about $1.6 billion for the construction of two Indonesian coal-fired power plants this year, a senior executive said on Thursday.

Southeast Asia's biggest economy has struggled with power shortages and blackouts in recent years, but is attempting to ramp up electricity supplies through a crash programme led by the state power firm PLN and including independent power producers to build coal-fired power plants

Takanori Satake, the chief representative of JBIC operations in Indonesia, told Reuters JBIC expected to sign the loan agreements for the Paiton 3 expansion project and the Cirebon plant, both located on densely populated Java island, soon.

"We are likely to sign the loan agreement this year. We want it as soon as possible," Satake said, adding that JBIC's main focus is on projects in the power and natural resources sectors.

The Paiton 3 expansion project is developing an 815 megawatts (MW) coal-fired power plant and is scheduled to start operations in early 2012, while the Cirebon plant is expected to generate 660 MW and is scheduled to start operations in 2011.

Both of the projects attracted Japanese interest, with Mitsui & Co Ltd and Tokyo Electric Power Company (9501.T) involved in the Paiton 3 and Marubeni Corp (8002.T) in the Cirebon project.

The government launched the first phase of the programme to add 10,000 MW generating capacity from 35 new coal-fired power plants, which are mostly still under construction.

The government is still finalising the second phase of the crash programme to add another 10,000 MW using coal, geothermal and renewable energy resources. (Reporting by Andreas Ismar; Editing by Sara Webb)