Tanjung Jati Power Project Ready to Built, PLN Issues Asset Back Securities

Photo by PLN

JAKARTA (TheInsiderStories) –The Government has commenced development of a 2 x 1,000 megawatt (MW) steam-power generation plant Jawa 4 in Tubanan Village, Jepara, Central of Java. The project is one of 35,000 megawatt plant development programs set up through the Independent Power Purchase (IPP), to meet an electricity shortfall in Indonesia.

This plant is expected to expand the Java-Bali electricity interconnectivity system and will be connected to the 500 kilovolt Tanjung Jati – Tx Ungaran transmission network, Minister of Energy and Mining Resources Ignatius Jonan informed reporters on Sunday (9/4).

It was developed on a 77.4 hectare plot, starting last April. Government targets operation of this plant within next 50~54 months, or shooting for May or September 2021.

PLTU Jawa 4 is will exploit the latest ultra-super-critical (USC) technology, allowing the plant to operate in temperatures and pressures above the critical point of water: with water and gas phase in balance, it can yield higher efficiency.

USC-based plants have 8~10% superior efficiency, compared to other coal-fired power generation units. This technology uses less coal and produces fewer carbon emissions; it is thus more environmentally-friendly.

Amir Rosidin, Central Java Regional Business Director of State-owned power producer PT Perusahaan Listrik Negara (PLN) announced that the company would continue to increase national electricity capacity, currently standing at 92.79 percent, while prioritizing environmentally-friendly power plants. Jawa 4 power project will fulfill growing electricity demand in Java and Bali, and is also expected to trigger investment in industrial development in Java and Bali, thus stimulating local economies.

“This power plant is operated by a PT Bhumi Jati Power (BJP) consortium, consisting of Sumitomo Corporation (50 percent share), PT United Tractors Tbk (25 percent), and The Kansai Electric Power Co., Inc. (25 percent),” he said.

In addition, this plant is structured with a BOT (build, operate and transfer) scheme, for a period of 25 years, effective the date of commercial operation. Investment has reached US$4.2 billion, using project financing, which mainly comes from equity placement by sponsor company, with the remainder from lenders.

Those include Japan Bank for International Cooperation and a pool of seven commercial joint financiers: Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mitsubishi UFJ Trust and Banking Corporation, The Norinchukin Bank, and Singapore’s Oversea-Chinese Banking Corporation Limited, guaranteed by NEXI Overseas Investment Insurance.

Indonesia Power Issue Rp4 trillion Asset Backed Securities

Meanwhile, PT Indonesia Power, a subsidiary of PLN engaged in power generation, offers Asset Backed Securities with a maximum value of Rp4 trillion (US$300.75 million) to investors. The securities get AAA rating from rating agency PT PEFINDO. The underlying securitized assets are financial assets in the form of Receivables from the Suralaya Power Plants Power Sale and Purchase Agreements.

The bid will start on Sept. 4, 2017 and will last until Sept. 11, 2017. The issuance of the note is in line with the company’s strategic plan to securitize asset as much as Rp 10 trillion, which will be done gradually until the end of 2018.

President Director of Indonesia Power, Sripeni Inten Cahyani said, “Funds from the issuance of securities is planned to be used to support the development of several new power plants, including Suralaya power plant units 9 and 10 with a capacity of 2×1000 MW “.

Furthermore, Inten said that securitization is one form of diversification of funding for the company. Acting as investment manager for the note is PT Danareksa Investment Management and Bank Custodian PT Bank Rakyat Indonesia Tbk (IDX: BBRI).

Currently, Indonesia Power manages 14,578 MW of generators spread from Sumatra to Papua, where in 2016 the company managed to contribute to national electricity production of approximately 29 percent.

US$1 : Rp 13,300

Writing by Yosi Winosa