The total project cost is estimated to be $1.52bn, which will be funded by a mix of debt and equity in an 80:20 ratio. International Power’s equity investment of $123m will be funded from current liquid resources.
The financing package is provided under the Japan Bank for International Cooperation (JBIC) Overseas Investment Loan program and comprises 17-year non-recourse loans denominated in US dollars and Japanese yen.
JBIC is providing direct loans totaling $729m equivalent, and commercial banks are providing a $486m equivalent loan, which is covered by an extended political risk guarantee from it.
The Paiton 3 project comprises a single 815MW coal-fired unit, which will be located within the existing Paiton complex. The project is being constructed under a fixed-price contract with Mitsubishi Heavy Industries of Japan.
Philip Cox, chief executive of International Power, said: “This expansion will provide much needed additional capacity on the key Java-Bali grid and we are pleased to have secured non-recourse finance, on attractive terms, for this high quality project. Paiton 3 will add to our long-term contracted earnings stream and demonstrates our ability to realize additional value from existing sites.”
The project is expected to be fully operational in 2012 and has a 30-year PPA with PT PLN (Persero), the Indonesian state utility. The plant will be operated by PT Ipmomi, the operator of the existing Paiton plant, in which International Power has a 59.5% interest.
