The Multilateral Investment Guarantee Agency (Miga) has guaranteed up to US$200mn to JBIC and Mizuho for the development and operation of a 47-megawatt hydropower plant and transmission line in Indonesia.
Miga is covering the risks of transfer restriction, expropriation, war and breach of contract. The facility aims to reduce Indonesia’s reliance on fuel oil by providing a cheaper and cleaner power supply to the state-owned electricity utility, PT Perusahaan Listrik.
“In this transaction, the guarantee extended by Miga is helping us enhance the overall security of the loan,” says a JBIC spokesperson. “Miga guarantees were essential for our decision to proceed with financing this important infrastructure project.”
Miga vice-president and CEO, Keiko Honda, hopes the agency’s role in facilitating this project financing will encourage more private investors to back Indonesia’s power sector. “The country’s power deficit is a major factor holding back broader and deeper economic growth,” she adds.