Two power producers in Indonesia have signed loan deals worth US$2bn
The largest of the loans went to Paiton Energy, the Indonesian-based power producer, who signed deals worth US$1.4bn.
The bulk of the loan comes from the Japan Bank for International Cooperation (JBIC), who has agreed to lend US$729mn for an 815 megawatt (MW) expansion of a US$1.5bn coal-fired project in East Java.
Paiton has also secured US$486mn in loans from commercial banks including the Bank of Tokyo Mitsubishi UFJ (BTMU), Sumitomo Mitsui Banking Corporation (SMBC) and BNP Paribas.
JBIC will also lend US$214.2mn to Cirebon Electric Power in West Java for a coal-fired power project with the capacity of 660 MW.
The Cirebon project has agreed loans of US$595mn from BTMU, SMBC and the Export-Import Bank of Korea (Kexim), bringing the total loans to Indonesian power up to US$2bn.
The Paiton expansion is due to begin in early 2012, while the Cirebon project is scheduled to start in 2011.
In recent years, Southeast Asia’s biggest economy has struggled with power shortages, and this series of loans is part of the nation’s first phase of a programme to increase generating capacity to 10,000 MW from 35 new coal-fired plants.
The government is still finalising the second phase of the programme to double the new amount to 20,000 MW by using coal, geothermal and renewable energy sources.
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