JAKARTA (TheInsiderStories)–PT Huadian Bukit Asam Power (HBAP), a joint venture power company between PT Bukit Asam Tbk (PTBA) and PT China Huadian Hongkong Company Ltd., secured US$1.26 billion loan commitment from the China Export Import Bank (CEXIM) to finance mine-mouth power plant Sumsel 8.
President Director of PTBA Arviyan Arifin said in the signing ceremony on May 23, the loan represents of 75 percent of the total project cost, while the remaining 25 percent or $420 million will be funded by shareholders. PTBA owns 45 percent and China Huadian owns 55 percent in the joint venture.
This 15-year loan carries an interest rate of London Interbank Offered Rate plus 2.8 percent per annum. The loan will be disbursed gradually depending on the project progress. The company expected the first disbursement by June 17.
PTBA targets construction to start June 2018 and commercial operation in 2021 for the first unit and in 2022 for the second unit. Sumsel 8 will be the biggest mine-mouth in Indonesia with a total capacity of 2×620 megawatts.
HBAP and PT Perusahaan Listrik Negara signed the power purchase agreement on 2014, then amended on October 19, 2017, due to the changes in electricity allocation.
The power plant will initially transmit electricity to Java via a high-voltage direct current transmission, but the Ministry of Energy and Mineral Resources demanded the electricity should be transmitted to Sumatra through a 500 kV high-voltage transmission. The amendment also demanded PTBA to build a 45 kilometers transmission to Muara Enim.
In addition to Sumsel 8 power plant, PTBA signed an agreement with PT Pertamina, PT Pupuk Indonesia, and PT Chandra Asri Petrochemical Tbk (IDX: TPIA) to establish a joint venture in coal gasification. This downstream project is expected to be operated by 2022.
PTBA committed to leverage the cooperation among state-owned companies. One of them is in the East Halmahera coal power plant with a capacity of 2×40 megawatt. This project will supply electricity for ferronickel smelter of PT Aneka Tambang Tbk (IDX: ANTM) in East Halmahera, North Maluku.
In addition, PTBA will cooperate with PT Indonesia Asahan Aluminium (Inalum) on the coal-fired power plant project in Kuala Tanjung Steam with a capacity of 2×350 megawatt. It will provide electricity for a smelter owned by PT Inalum.
PTBA targets to spend Rp6.55 trillion this year, consisting of Rp1.43 trillion for routine investment and a Rp5.12 trillion for expansion.