A consortium of Asian banks is to provide the finance for the expansion of the Tanjung Jati B coal-fired power plant in Indonesia’s Central Java province.
The Japan Bank for International Cooperation (JBIC) has announced that it has signed a loan agreement with PT Bhumi Jati Power (BJP) for $1678 million supporting the project.
The finance is part of a co-financing deal agreed with a number of other Asian financial institutions, including Mizuho Bank, Sumitomo Mitsui Banking Corporation and the Bank of Tokyo-Mitsubishi, amounting to $3355 million.
The project involves the construction and operation of an ultra-supercritical plant with an installed capacity of 2000 MW in Jepara district. Power from the facility will be sold to national utility PT PLN (Persero) for 25 years.
The expansion project is part of wider plans to expand generating capacity in Indonesia by 35 000 MW by 2019. Coal-fired generating capacity is a key element of the plans.
Two French banks – Crédit Agricole and Société Générale – were to have provided finance for the project. Société Générale reversed its plans, however, in line with its pledge to cease funding of coal-fired capacity. Crédit Agricole is not listed in the partner banks published by JBIC.
“This loan supports an overseas infrastructure project in which Japanese businesses will participate as investors and become involved in its operation and management for a long time by taking advantage of the country's advanced technology,” JBIC said in a statement. “It will contribute to maintaining and strengthening the international competitiveness of Japanese industries.
“Additionally, the loan is for an IPP project for an ultra-supercritical power plant that introduces efficient and environmentally friendly technology to Indonesia.”