Central Java Coal-Fired Power Plant (CFPP) 2 x 1.000 MW Achieves Financial Close, Construction Begins Soon

Jakarta, June 9th, 2016 - PT Bhimasena Power Indonesia (BPI) has reached a financing agreement with the creditors for Central Java Coal Fired Power Plant (CFPP) with capacity 2 x 1.000 MW. The total investment for this project approximately US$ 4.2billion with total funding received from the lenders aproximately US$ 3.4billion coming from Japan Bank for International Cooperation (JBIC) and syndicate of bank consisting of 9 commercial bank that is SMBC, BTMU, Mizuho, DBS, OCBC, Sumitomo Trust, Mitsubishi Trust, Shinsei dan Norinchukin.

Power purchase agreement (PPA) between BPI and PT PLN (Persero) was signed on October 6, 2011. In addition, the Guarantee Agreement has also been signed among others by the Government of the Republic of Indonesia (represented by the Ministry of Finance), Indonesia Infrastructure Guarantee Fund (IIGF), and BPI. IIGF was established by the Government of the Republic of Indonesia to provide guarantees for government agencies that carry out the agreement between the government and private sector, in this case provide a payment guarantee to the PLN power plant project in Central Java 2 x 1.000 MW set out in the PPA. This is a scheme of cooperation between government and private partnership (PPP), which was first realized in Indonesia with a guarantee provided by IIGF.

President Director of BPI, Mohammad Effendi explained by the completion of this financing process BPI will soon start main construction of power plant project in Central Java. Earlier, on April 30, site hand over has been done to the Engineering Procurement Contractor (EPC). 

Furthermore, Effendi explained that the completion of this financing process proves the high trust of the lenders to invest in Indonesia in this regard on the power plant project in Central Java 2 x 1.000 MW. Moreover, since the beginning, a great support from the central government, provincial of Central Java and Regency of Batang, as well as other stakeholders and the public to this project.

“We are grateful that Central Java CFPP project’s financial close was finally signed. We would like to extend our gratitude for the creditors’ trust and the Indonesian government’s full support for the immediate commencement of construction process,” Effendi explained in Jakarta. Central Java CFPP project will use the latest technology Ultra-Super-Critical (USC) steam conditions and flue gas treatment systems which minimize emissions/dispersions towards the environment.USC steam conditions provide much higher thermal efficiency than conventional steam conditions, such as subcritical and supercritical. Higher thermal efficiency means lower coal consumption rates, which in turn, lowers emissions. 

"We expect the construction of this power plant will run smoothly and can operate on target after 48 months construction. With the operation of this plant will support the national energy supply, which is expected to stimulate the economy development and community welfare," said Effendi. He also expects the presence of the power plant will have a direct impact on the community's economy in Batang. "With the presence of the power plant will be a multiplier effect which will emerge a variety of new economic centers and supporting business activity of the plant. So that in the future, we expect the presence of this power plant can provide more benefits to the local and national interests, "he added.

BPI has obtained the Environmental Permit on August 21, 2013 by Central Java Governor Decree No. 660.1 / 37 Year 2013. In a document on environmental impact assessment (EIA) and the Corporate Social Responsibility (CSR), BPI has also delivered a number of program activities management impact for Central Java CFPP both the impact of environmental, social, and economic. One was to overcome land acquisition impact, BPI has given social compensation to the affected farmers and preparing replacement land for livelihood changing patterns as one of the solutions. A number of community development programs have also been carried out and will continue to be improved for the development of a sustainable society.

About PT Bhimasena Power Indonesia

PT Bhimasena Power Indonesia (BPI) is a consortium of Electric Power Development Co., Ltd. ("J-Power"), Itochu Corporation ("Itochu") and PT Adaro Power, which is wholly owned by PT Adaro Energy.

Central Java CFPP 2 x 1,000 MW is the first infrastructure project of Public Private Partnership (PPP) and implement scheme the Build, Own, Operate, Transfer (BOOT). This project became part of the Master Plan for the Acceleration and Expansion of Indonesian Economic Development that will be the locomotive of economic development of Java. Central Java CFPP 2 x 1.000 MW will use the latest technology that is more efficient and environmentally friendly, Ultra Super Critical.