JAKARTA (TheInsiderStories)–The International Finance Corporation (IFC), a member of the World Bank Group, has proposed to extend a debt financing package of up to $50 million to support the development of a 275-megawatt (MW) combined cycle gas turbine power plant in Riau Province, Sumatera, Indonesia.
PT Medco Ratch Power Riau, a consortium of PT Medco Power Indonesia and Ratchaburi Electricity Generating Holding of Thailand, has started the construction of gas power plant (PLTGU) in Pekanbaru, Riau, Sumatera Island.
Head of Investment Office of Pekanbaru Muhammad Jamil told reporters on Monday that the consortium firm will develop the PLTGU with an installed capacity of 250 MW with a total investment of US$300 million or around Rp3.5 trillion.
All required permits, including principal permit to develop the power plant as well as power purchase agreement (PPA) with the state electricity company PLN has been sealed.
PLN president director Sofyan Basir has said earlier that the power plant development is guaranteed by the government. The project tender kicked off in 2015.
The power plant will be developed on 18 hectares of land, consisting of two units — 90 MW and 160 MW. The power plant is expected to resolve power shortages in the region.
PT Medco Energi Internasional Tbk (MedcoEnergi) announces that it has acquired a 77.68% interest in PT. Saratoga Power from Saratoga and other shareholders. With this transaction, the company has increased its effective interest in PT. Medco Power Indonesia (“MPI”) from 49% to 88.62%. The remaining 11.38% effective share in MPI held by the International Finance Corporation (“IFC”) is unchanged.
Established in 2004, MPI is a leading mid-sized Independent Power Producer (IPP) in Indonesia with its primary focus on power from natural gas and geothermal sources. MPI currently operates over 520MW of gross installed capacity following the commercial operation of the Cibalapulang 1 mini-hydro facility in September 2017, and the expected commercial operation of the Sarulla Unit 2 geothermal plant in October 2017, one month ahead of schedule. MPI gross operated capacity will further increase when Sarulla Unit 3 (110MW) reaches commercial operation in Q2 2018, and Riau CCPP (275MW) in 2021.
MPI Operation & Maintenance (O&M) business has also expanded and now operates over 2,000MW of third-party power plants. This expansion is driven by two new O&M contracts signed in late 2016 where MPI now operates the Sarulla Geothermal units and PLN gas-turbine units in eight locations across Indonesia.
Hilmi Panigoro, the President Director of MedcoEnergi, said that “this acquisition allows the Company to regain majority control of MPI and to strengthen our position in the power generation sector, which is expected to continue growing at 9% per annum over the next ten years. Our increased control over MPI is consistent with the Company’s strategy to grow in three main sectors; oil and gas, mining and power, and unlocks the greater potential for synergies with our upstream gas business.”
IFC, a member of the World Bank Group, today issued a $2 billion global bond, that will unlock financing to boost the private sector in developing countries, creating additional jobs, climate-smart businesses, and women entrepreneurs. The heavily oversubscribed issuance—the five-year benchmark bond generated an order book of about $3.9 billion—indicated strong investor demand.
“The recent decision by our Board to support a $5.5 billion capital increase for IFC ensures that IFC will have the capacity to significantly scale up its investments in some of the most challenging and poorest countries – to spur private sector growth and create jobs, with a focus on climate finance, women’s entrepreneurship, infrastructure, and small and medium-sized businesses,” said Jingdong Hua, IFC Vice President & Treasurer. “
The reoffer yield was 2.978 percent—the equivalent of 15.25 basis points over the corresponding U.S. Treasury note. Central banks and other official institutions accounted for 61 percent of the orders, followed by banks at 33 percent. Seventy-seven percent of orders came from investors in the Americas and Asia combined. The proceeds of this issue will be swapped into floating-rate U.S. dollar funds that will be available for IFC investments in emerging markets.
“This is another landmark transaction for IFC and an impressive achievement to begin the 2018/19 funding program,” said Lee Cumbes, Managing Director, Head of Public Sector EMEA, Barclays. “The transaction delivers the tightest pricing on record for a 5-year US Dollar SSA deal 2018—a fitting compliment for IFC’s standing in the market— whilst still delivering what central bank and treasury investors wanted, with a fair price, in a rare name and liquid format.”
Laura O’Connor, Fixed Income Origination and Syndication, TD Securities, said: “IFC chose the optimal window to price the first USD benchmark transaction of their new fiscal year,” “Opting for the 5-year maturity, IFC captured global demand for a liquid cash alternative asset and executed the deal flawlessly. With this transaction, IFC achieved their tightest spread to mid-swap for a 5-year benchmark from the SSA sector since July 2015.”
Guy Reid, Managing Director, Head of EMEA Syndicate, Mizuho Securities, said: “IFC was quick to respond to strong investor demand for high-quality securities in the intermediate part of the curve. IFC was able to amass an order book of nearly US$4 billion at a negligible concession to secondary market levels despite an environment of tight credit spreads and narrow swap spreads—testament to the high regard IFC is held by international investors and the tireless work done with these investors over many years.”
IFC has issued US dollar-denominated global bonds each year since 2000. Most of its borrowings are swapped into variable-rate U.S. dollars. IFC also issues local-currency bonds to develop local capital markets and to fund local-currency investments, and discount notes in U.S. dollars. All IFC bond issuances are rated triple-A by Standard & Poor’s and Moody’s.