Japan Bank for International (JBIC) has agreed to provide $3.4bn loan to fund the construction the delayed 2,000MW Batang coal power project in Central Java, Indonesia.
The funding has also been contributed by other banks including Sumitomo Mitsui Banking, Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank, Sumitomo Mitsui Trust Bank, Mitsubishi UFJ Trust and Banking, Shinsei Bank, Norinchukin Bank, and two Singaporean entities, DBS Bank and Oversea-Chinese Banking.
PT Bhimasena Power Indonesia (BPI) is responsible for the construction and operation of the ultra-supercritical coal-fired power generation plant in Batang Regency in Central Java Province.
BPI is a joint venture between Indonesian coal miner PT Adaro Energy Tbk and Japan’s Itochu Corp and Electric Power Development (J-Power).
Power generated from the BPI-owned power generation plant will be sold to Indonesian power utility PT PLN (Persero) under a 25-year power purchase agreement.
Construction of the power plant was initially planned in 2012. However, it was delayed repeatedly following opposition from landowners, who refused to give up their paddy fields for the project development, reported Reuters.
The project is expected to contribute to the county’s effort to have 35GW of installed power generation capacity between 2015 and 2019.
The project also represents the first under the country’s Public Private Partnership (PPP) scheme, which aims to accelerate the development of vital infrastructure for the country.
Indonesia launched PT Penjaminan Infrastruktur Indonesia (IIGF) as part of the scheme in 2009 to provide guarantees for PPP projects along with the Indonesian government.