PLN to build 3rd unit of Asahan hydro power plant

Antara News, Monday, January 18, 2010 21:46 WIB

Jakarta (ANTARA News) - State electricity company PT Perusahaan Listrik Negara (PT PLN) plans to build the third unit of the Asahan hydro power plant to meet power demand in Sumatra.

"It has been decided at our meeting earlier today that PT PLN will build the third unit of the Asahan hydro power plant," Coordinating Minister for Economic Affairs Hatta Radjasa said after a meeting at the vice presidential office here on Monday.

Also present at the meeting led by Vice President Boediono were Energy and Mineral Resources Minister Darwin Shaleh, State Enterprises Minister Mustafa Abubakar, PLN president director Dahlan Iskan, president director of state oil and gas company Pertamina Karen Agustin, and president director of state gas company PT PGN Hendi Priyosantoso.

Hatta said PLN would build the power plant with a capacity of 2x87 megawatts itself.

"The project will cost an estimated US$420 million using soft loans from JBIC. The loans will have a grace period of 40 years and carry an annual interest rate of 0.7 percent," he said.

PT PLN president director Dahlan Iskan said the company had been in talks with the Japan Bank for International Cooperation (JBIC) to discuss the loan.

Japan still expects to buy LNG from Donggi Senoro

Alfian , The Jakarta Post, Jakarta | Tue, 11/24/2009 1:09 PM

A high ranking official from Japan told reporters Monday that the world's largest LNG (liquefied natural gas) buyer still expects to get LNG supply from the much-debated Donggi Senoro project in Central Sulawesi.

"The project is very much important for both sides *Indonesia and Japan* and yes *we still hope to get LNG supply from the project*," Takayuki Ueda, Japan's director general for natural resources and energy said on the side lines of the 10th Indonesia-Japan Round Table in Jakarta.

Ueda added that he was optimistic about the project's LNG market prospects even though Kansai Electric Power Co. Inc. had dropped its plan to buy LNG from the project. "The project needs to find another customer, but since the project is very fruitful, I hope many companies would like to joint in this project," said Ueda, adding that he still expected the project to be on schedule despite the protracted ongoing negotiations.

The Donggi Senoro LNG plant is prepared to produce LNG from natural gas from Senoro and Matindok gas fields in Central Sulawesi. Japan intends to play a big role in the project as Mistubishi Corporation holds a controlling 51 percent share in PT Donggi Senoro LNG, a joint venture prepared to operate the LNG plant. State oil and gas company PT Pertamina holds a 29 percent participating stake in the venture, while PT Medco Energi Internasional holds the remaining 20 percent.

Japan had planned to play a significant role in project financing as the Japan Bank for International Cooperation (JBIC) was prepared to be the majority lender both for the upstream and downstream sides of the project, requiring about US$3.4 billion. But this was on the basis that the LNG would be exported to Japan to supply Japanese power companies.

The joint venture firm had therefore signed initial agreements for gas sales with two of Japan's leading power companies: Kansai and Chubu Power Co. Inc. Under the agreement, each company would have been supplied with 1 million tons of LNG per year from the plant for 12 years, starting from 2012.

But, the LNG project has been in limbo since at the end of the tenure of the last cabinet, the outgoing government, led by former Vice President Jusuf Kalla, decided the natural gas from the two blocks should go to the domestic market. This government decision led Japan's Kansai Electric Power Co. to drop its plan to buy the LNG from the project.

Now Medco and Pertamina are in talks with three potential domestic buyers: state power producer PT Perusahaan Listrik Negara (PLN), state power producer Pupuk Sriwijaya, and domestic ammonia producer Panca Amara Utama (PAU).

The developers are also in talks with several domestic banks, as JBIC will no longer provide loans if the gas is not intended to be processed as LNG for export purposes.

Last week, the domestic banks were supposed to propose how much they could finance the project. But, the director general for oil and gas Evita H. Legowo said the matter was still being discussed.

PLN to tender 3 new projects

Nani Afrida , The Jakarta Post , Jakarta | Mon, 11/23/2009 10:39 PM

State electricity producer PT PLN on Monday revealed it would hold put three new electricity projects to tender, to be financed by export credit.

The projects are to install submarine cable in Bali; to empower network and electricity distribution in Jakarta and to upgrade the capacity of the Muara Tawar add-on gas and coal-fired power plant (PLTGU) in Bekasi, West Java.

“We will hold a tender for these projects,” PLN planning and technology director Bambang Praptono told reporters at the House of Representatives in Jakarta on Monday.

The submarine cable project is worth US$60 million (Rp 6 trillion), while the projects in Jakarta and West Java are worth $300 million and $1 billion.

Bambang said several foreign financing institutions had voiced interest in the projects already. The institutions are the Japan Bank for International Corporation (JBIC), the Japan International Coorperation Agency (JICA) and German Bank, KfW.

Funding for the projects would be taken from export loans and PLN's internal budget, Bambang said.

“For example, the Muara Tawar project requires $1 billion, so it will take $850 million from export loans and $150 million from PLN,” he said.

PLN to tender 4 power plants under 2nd crash program

Alfian , The Jakarta Post, Jakarta | Fri, 11/20/2009 1:05 PM

State utility company PT PLN plans to open tenders for construction of four power plants with the total capacity of 1,648 megawatt (MW) next year, a director said.

"All the power plants are included in the second phase 10,000 MW electricity crash program. We expect to open the tender for the construction in 2010," PLN's planning and technology director Bambang Praptono told reporters Thursday.

The four power plants are: the 1,000 MW Cisokan power plant in West Java; the 2x100 MW New North Sumatra power plant in North Sumatra; the 2x174 MW Asahan III power plant in North Sumatra; and the 2x50 MW Parit Baru power plant in West Kalimantan, he added.

Bambang said the construction of these power plants would require as much as US$1 billion for the Cisokan power plant; $500 million for the New North Sumatera power plant; $300 million for the Asahan III power plant; and $250 million for the Parit Baru plant.

"As for the Cisokan power plant, we have got a $1 billion loan commitment from World Bank. We will open the tender for its construction next year and the power plant is expected to be on stream between 2013 and 2014," Bambang said.

The remaining projects may be financed by Japan International Cooperation Agency (JICA) and by a consortium of banks from China, he added.

The government launched the first 10,000 MW power project in 2006, in a bid to anticipate increasing demand for electricity, which has been growing by at least 7 percent annually.

The second phase 10,000 MW program is being planned now and is scheduled to be implemented between 2010 and 2014.

In a presentation in August, PLN said the projects under the program were expected to generate a total electricity capacity of 10,580 MW. Of this capacity, 5,685 MW will be located in Java and the remaining 4,895 MW will be outside Java.

The construction of the power plants under the project will require $10 billion, PLN's president director Fahmi Mochtar said Oct. 20.

Bambang said that one of the power plants under the second 10,000 MW project, the 120 MW Lahendong IV geothermal power plant in North Sulawesi, has already secured a financing commitment and has selected the engineering, procurement, and construction (EPC) contractor.

The $30 million power plant will be financed by a loan from Asian Development Bank (ADB), while its EPC will be done by Sumitomo.

Under the second crash program, it is proposed that 12 percent of the power generated will be generated by hydro plants, 48 percent from geothermal plants, and 14 percent from gas plants, and the remaining 26 percent from coal fired plants.

Under the first 10,000 MW program, all the proposed power plants were coal-fired.

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)

JBIC offers to fund expansion of Indonesia`s Muara Tawar power plant

Jakarta (ANTARA News/Asia Pulse) -- Japan Bank for International Cooperation (JBIC) has offered to provide a loan of US$900 million to finance the capacity expansion of the Muara Tawar combined cycle power plant.

The expansion unit will use the cogeneration technology to generate electricity. The tender for the cogeneration project of Muara Tawar will be held this year, Fahmi Mochtar, the president of the state power utility PLN, said.

The project is part of the second crash program to build power plants with a total capacity of 10,000 megawatts.

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Govt eyes overseas loans for power program

Japan guarantees RI’s first samurai bond

Rendi A. Witular ,   THE JAKARTA POST ,   PHUKET, THAILAND  |  Mon, 02/23/2009 10:55 AM  

In agreement: Finance Minister Sri Mulyani Indrawati (right) and Japanese Parliamentary Secretary for Finance Shinsuke Suematsu shake hands after signing a financial sector deal in the Thai resort island of Phuket on Saturday. JP/Rendi A. Witular

Japan agreed Saturday to provide financial support worth US$1.5 billion for guaranteeing Indonesia’s planned yen-denominated bond, known as the samurai bond. 

Finance Minister Sri Mulyani Indrawati and Japanese Parliamentary Secretary for Finance Shinsuke Suematsu forged the guarantee deal during the special ASEAN+3 Finance Minister’s meeting in the Thai resort island of Phuket. 

Mulyani said the bond, which would be Indonesia’s first ever, was aimed at helping the government plug this year’s widening budget shortfall after it planned to unload more funds to stimulate the economy amid the global economic hard times. 

“The fund will be provided in the form of a guarantee by the Japanese Bank for International Cooperation (JBIC) to the Indonesian government in issuing yen-denominated foreign bonds in the Japanese capital market,” Mulyani said. 

“Under the deal, if the bond fails to lure the appetite of Japanese investors, and the yield is deemed too expensive for the Indonesian government to bear, Japan can convert the fund into ordinary loans to help cover the budget deficit.” 

Mulyani could not provide the exact timing for the issue, saying it would depend primarily on the condition of the global financial sector. 

Indonesia, Southeast Asia’s largest economy, will need to link the samurai bond with the JBIC because the country’s sovereign investment rating is insufficient for the issue, according to the Finance Ministry’s head of fiscal policy, Anggito Abimanyu. 

The JBIC has AAA rating. 

While primarily aimed at keeping the budget deficit in check, Anggito said the bond proceeds or the loans would be allocated mostly to finance trade and projects linked to Japan. 

The Finance Ministry’s director general for budget management, Anny Ratnawati, said last week

the deficit would swell to Rp 136.9 trillion ($11.1 billion), or 2.6 percent of the country’s GDP, from a previous forecast of Rp 129.5 trillion, or 2.5 percent of the GDP. 

Aside from the guarantee facility, Mulyani also said Japan had agreed to help the stability of the Indonesian economy and complement its current strong position of foreign reserves by upgrading the size of the existing bilateral swap arrangement. 

Under the Chiang Mai Initiative, Japan and Indonesia will double the swap deal to $12 billion.

The initiative was inked in Thailand in 2000, aimed at creating a network of bilateral swap arrangements among ASEAN+3 countries to address short-term liquidity difficulties in the region and to supplement existing international financial arrangements. 

ASEAN+3 includes the 10 members of ASEAN — the Philippines, Indonesia, Thailand, Malaysia, Singapore, Brunei, Vietnam, Myanmar, Cambodia and Laos — as well as the three East Asian nations of Japan, China and South Korea. 

The bigger swap allocation will strengthen Indonesia’s foreign currency reserves in case of a sharp depreciation in the rupiah against the US dollar. Latest central bank data shows Indonesia’s foreign exchange reserves currently stand at $50.87 million. 

Bank Indonesia uses the reserves to supply the financial market with the greenback, making sure the volatility in the rupiah can be maintained at favorable levels. 

The rupiah has been losing ground over the past weeks, hovering at above Rp 12,000 per dollar, higher than the Rp 11,000 earmarked under the planned revision of this year’s state budget, as banks shop for more dollars to pay for derivatives deals with exporters. 

While the declining value of the rupiah is in part good for exports, it creates a greater harm, especially for the country’s ability to pay dollar-denominated government and private sector debts, as well as the ability to finance international trade. 

“The deal with Japan, which is a very progressive move, can ease speculation in the rupiah because Indonesian foreign currency reserves are getting bigger and stronger. This will boost confidence in the market and in the businesses,” Mulyani said. 

She added Japan was ready to take part in a joint contingent loan facility for Indonesia, which is being elaborated by Indonesia and its development partners, including the World Bank, the Asian Development Bank and other countries. 

“Although the Indonesian economy remains sound, there’s still a need for a second line of defense in a bid to fully anticipate the worst from the impact of the global economic crisis,” she said.

PLN seeks for more loans

Mustaqim Adamrah, The Jakarta Post, Jakarta | Thu, 01/22/2009 4:35 PM  

State electricity firm PT PLN has secured at least US$1.35 billion in loans to run a second 10,000 MW program sponsored by the government. 

"PLN has secured loans amounting to US$1.148 billion from the World Bank to finance a project in Cisokan, West Java, and $200 million from JBIC (Japan Bank for International Cooperation) to fund a project in Asahan," Energy and Mineral Resources Purnomo Yusgiantoro told the press Wednesday. 

He was speaking after a meeting with Vice President Jusuf Kalla in the Vice President's Office. 

PLN, he said, would need to contribute $3.8 billion to fund projects under the second "10,000 MW crash program", which requires a total of $17.3 billion in investment. 

PLN president director Fahmi Mochtar, also present at the meeting, said the company would raise the funding from soft loans. 

"We already received offers of soft loans from China, Korea, the Middle East and Europe." 

According to Purnomo, out of the total $17.3 billion, the remaining $13.5 billion will be generated by private contractors. 

He said that under the program, PLN will build two power plants in the Java-Bali system, while 43 other plants will be built by private contractors, or independent power producers, comprising 22 projects in Java and Bali, and another 32 projects off the Java-Bali system on the other islands. 

"We see many contractors, particularly those from China, are interested to participate in the (second) program despite the crisis because the power sector is lucrative and these projects are all long-term, running for 30 to 40 years " he said. 

Purnomo said private contractors and PLN were expected to start public bidding in the second and third quarters of this year, respectively. 

Fahmi said the second program was scheduled for completion by 2012, "or 2013 at the latest". 

Unlike the first program, which is entirely designated for coal-fired power plants, the second program will have 12 percent of total power generated by hydro plant, 48 percent by geothermal plant, and 14 percent by gas , plus 26 percent by coal. 

The first program commenced in 2007 and is slated to finish by 2010. 

Indonesia has the world's largest geothermal reserves, with an estimated capacity of up to 27,000 MW of electricity - equal to around 40 percent of the world's geothermal reserves. 

However, Indonesia's existing 18 operational geothermal plants only produce a combined 1,050 MW.

PLN to get cheap power supply from Japan's Sumitomo in 2012

The Jakarta Post, Jakarta | Fri, 01/02/2009 10:29 AM  

State power company PT PLN is set to secure about 1,320 megawatts (MW) of power from a plant constructed and run by Japan's diversified business giant Sumitomo Corporation. 

The power supply, to be provided at a competitive price, will be available in early 2012. 

PLN vice president Rudiantara said the company was confident about getting the cheap supply after Sumitomo received 200 billion yen (US$2.2 billion) in loans from a consortium of Japanese banks to finance the construction of the plant. 

The coal-fired plant, known as Tanjung Jati B, will be additional to the 1,320 MW Tanjung Jati A plant in Jepara, Central Java. 

"The loan agreement was signed last week between Sumitomo and a consortium of Japanese banks led by JBIC (Japan Bank for International Cooperation)," Rudiantara said Wednesday. 

"We hope the financial closing can be wrapped up in January so Sumitomo can start the project construction soon." 

In November, PLN and Sumitomo signed a leasing agreement for PLN to purchase power from PT Central Java Power (CJP), the Sumitomo unit that operates the plant, for 23 years before taking over the plant entirely. 

According to Rudiantara, PLN has benefited from the newly signed loan agreement between Sumitomo and JBIC because it enables PLN to buy electricity from CJP for 2.65 US cents per kilowatt hour (kWh), a price much lower than CJP's previous offer of 4.3 cents per kWh. 

"You can say the loan agreement has become a New Year's gift for PLN," Rudiantara said, adding the deal had also proved the country's power projects offered promising returns for foreign investors. 

In a bid to meet the increasingly rapid growth in national demand for electricity, PLN has been actively involved in the government-initiated construction of power plant projects to supply a total 10,000 MW. 

To complete the projects by 2010, PLN will need Rp 17.33 trillion ($1.55 billion) to build power stations and Rp 8.58 trillion for transmission systems. 

For last year only, PLN secured Rp 3.7 trillion to build power plants and Rp 7.03 trillion for transmissions systems. (hwa)

Government to set up infrastructure fund

Alfian, The Jakarta Post, Jakarta | Fri, 11/28/2008 10:50 AM  

In a move expected to stimulate economic growth, the government will set up an institution to manage a pool of funds to support the financing of infrastructure projects, the National Planning Board (Bappenas) said Thursday. 

The funds will come from the government and donors, Bappenas deputy for infrastructure development, Dedy Supriadi Priatna, said. 

"We are calling it the infrastructure fund. It will be launched in February and will begin operating in April next year," Dedy said during a seminar titled "Solution for Power Plant Project Financing". 

Dedy said the government would work with multinational donors such as the World Bank, the Asian Development Bank (ADB) and the Japan Bank for International Cooperation. 

"So far, about US$600 million in funds has been gathered. The government is contributing about Rp 1 trillion ($82.65 million). We expect to own between 15 and 20 percent of the company," Dedy said. 

Although the amount pooled to date is not considered enough to finance infrastructure, the government expects more funds to be generated once the institution is operational, he said. 

The function of the institution will be to support investors wishing to engage in infrastructure projects, particularly those investors who fail to secure bank loans after winning a project. 

"Project winners often fail to get bank loans because of the lack of funds. Most banks require loan applicants to put up at least 30 percent for their proposed projects. Most infrastructure businesspeople here have only about 10 percent of the equity," Dedy said. 

"We hope the infrastructure fund will help them in this regard." 

The government estimates about US$65 billion will be needed in new infrastructure investment in the next three years. With government funding limited, the private sector is expected to play a crucial role. 

State Minister for State Enterprises Sofyan A. Djalil has said state companies will push ahead with their infrastructure projects to help keep the economy running next year. 

The lack of infrastructure development in Indonesia is frequently cited by investors as being detrimental to economic growth. New infrastructure projects such as roads, power stations and telecommunications networks are expected to help generate greater economic activity and growth. 

Meanwhile, the ADB confirmed it is helping the government to improve the nation's infrastructure. 

In a statement released Thursday, the agency said it was providing an additional $280 million loan to support reforms in Indonesia's infrastructure sector. 

It said the loan would be used to fund programs seeking to encourage private sector participation and help improve the investment climate.

RI to get $2b in loans from World Bank for development

The Jakarta Post, Sat, 05/03/2008 11:14 AM 

The World Bank will lend US$2 billion for the country's development programs this year, the National Development Planning Board (Bappenas) announced Thursday.

The government could receive even more loans than those previously promised, according to Bappenas director for international financing Dewo Broto Joko Putranto.

"The (additional) loans can be included as loans allocated for 2009," said Dewo, as quoted by Antara.

The board will wait until it learns the exact amount needed to plug this year's state budget deficit before determining how much to propose the World Bank allocate.

World Bank spokesman Randy Salim said the $2 billion in loans would be divided into program loans and project loans.

"About $1.2 billion of the loans will be spent on programs related to climate change, education and infrastructure policy development," Salim told The Jakarta Post.

"On top of this amount, there is another $400 million in programs related to poverty alleviation."

The remaining $400 million, he said, would go toward developing roads, dams and flood-control projects and improving tax administration.

"Indonesia and the World Bank are also negotiating $300-$400 million in additional loans for infrastructure development," Salim said.

This month the World Bank will release its "Infrastructure Development Policy Loan", in which some $200 million will be channeled to support infrastructure improvement in Indonesia.

In a related development, the director general for state debt management, Rahmat Waluyanto, said the government would get an additional $2.9 billion in program loans this year, as reported by Antara.

Of this amount, $1.1 billion would come from the Asian Development Bank and $500-$600 million from the Japan Bank for International Cooperation (JBIC).

Waluyanto said part of the JBIC loan would be spent on programs related to climate change.

"About $1.2 billion worth of the loans will be used to plug the state budget deficit this year," Waluyanto said. (JP/rff)

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