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The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totaling up to Y30.4bn (US$284mn) with the government of Indonesia to finance exports for a power plant project.

 

The loan was co-financed with private financial institutions, including Bank of Tokyo-Mitsubishi as the lead bank, Sumitomo Mitsui Banking Corporation, and Tokyo branches of BNP Paribas, HSBC, ING, and Standard Chartered.
The project consists of constructing a natural gas-fired combined-cycle power plant with a capacity of 740MW in Cilegon district, western Java.

 

The export credit will finance the export by Mitsubishi Corp of power generation equipment, including gas turbines, steam turbines and generators, to PLN, a state-owned power company that will implement the project.
Power demand in Indonesia is growing rapidly, in particular in the Java-Bali power system, where it is projected to increase by 6.8% annually up to 2010.

 

This has raised concerns over the emergence of serious power shortage and it is hoped that this project will prevent such a situation arising. Furthermore, JBIC’s contribution to the country’s stable supply of power will support the local business operations of a number of Japanese firms operating in Indonesia.


JBIC has supported Indonesia’s power sector over the years, not only by providing export loans but also by combining multiple lending facilities, including ODA loans. Aside from these financing operations, JBIC has been making comprehensive efforts to help resolve the country’s power problems as well as steer power sector reform by engaging in consultations with the Indonesian government and other stakeholders.