Japan's JBIC to Sign $1.6 Billion Loan Agreement for Two Indonesian Coal-Fired Power Projects

---

Researched by Industrial Info Resources (Sugar Land, Texas)--State-owned Japan Bank for International Cooperation (JBIC) (Tokyo, Japan) will sign loan agreements by the end of 2009 that will provide a loan worth about $1.6 billion toward the development of two coal-fired power plants in Indonesia. According to Takanori Satake, chief representative of JBIC's operations in Indonesia, the bank will sign the loan agreement for the Cirebon power plant and the Paiton 3 expansion project, both of which are located on the island of Java. He added that the main focus of JBIC was on projects in the areas of power and natural resources.

The Cirebon power plant, being developed by independent power producer (IPP) PT Cirebon Electric Power (Cirebon, Indonesia), will be designed to generate 660 megawatts (MW) and is scheduled to be operational from 2011. The Paiton 3 expansion project will generate 815 MW using a coal-fired supercritical unit and is scheduled to be operational from early 2012. Both projects have attracted the interest of several Japanese companies. While Marubeni Corporation (OTC:MARUY) (Tokyo) is involved in the Cirebon project, Mitsui & Company Limited (TYO:8031) (Tokyo) and Tokyo Electric Power Company (TYO:9501) (Tokyo) are involved in the Paiton 3 expansion project. Mitsubishi Heavy Industries Limited (TYO:7011) (Tokyo) will supply the main equipment to Paiton 3. The Paiton 3 expansion project requires an estimated investment of $1.45 billion. Upon completion, the project will provide a huge boost to the Java-Bali power grid.

In September 2009, IPP PT Paiton Energy (East Java, Indonesia), which operates the 1,230-MW Paiton I plant, signed purchase agreements with coal mining companies PT Adaro Energy Tbk (JAK:ADRO) (Jakarta, Indonesia) and PT Kideco Jaya Agung (Jakarta) for the purchase of 2 million tons per year and 1 million tons per year of coal, respectively, from 2011. The coal will be used to operate Paiton 3.

In recent times, Indonesia has been struggling with power scarcity and blackouts. In an effort to overcome the crisis, state-owned power company PT Perusahaan Listrik Negara (Jakarta) is leading a fast-paced power expansion program. Several IPPs are also involved in the implementation of the program. The first phase of the program was launched in 2006 and involves the addition of 10,000 MW of power generating capacity through the development of 35 new coal-based thermal power plants. Most of the projects are under construction. Three plants with a combined capacity of 1,960 MW are expected to be operational by the end of this year. The second phase of the program involves the addition of another 10,000 MW of generating capacity using geothermal and renewable energy sources in addition to coal. The second phase of power generation expansion is still being finalized.

View Plant Profile - 1068169 1029591 1020267 1071609

View Project Report - 93000171 93000025

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.