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Cirebon Power II financial closing delayed to end February

JAKARTA (RambuEnergy.com)PT Cirebon Energy Power (CEP) expects to sign financing deal worth around US$2 billion with international lenders to finance the construction of the 1000 megawatt (MW) Cirebon 2 power project, just east of the city of Cirebon in West Java, at the end of February, delayed from planned end December last year, company President Director Heru Dewanto said.

“We now expect to sign the financial closing at end February,” Heru Dewanto said on the sideline of a seminar on Energy Roadmap, held by the Insider Network yesterday (Jan. 25).

He said there still technical issues need to be resolved before signing the financial deal, including complying with the central bank, Bank Indonesia, regulation that all domestic transactions have to be made in rupiah.

Earlier, the company has received business viable guarantee letter (SKJU) for the project, which paved the way for the company reach financial close for the project

He said the main lender would be Japan Bank for International Cooperation (JBIC) and Korean Eximb Bank (K-Exim). The loan tenor will be 19 years. However, he declined to disclose the interest rate as it is still confidential at this stage.

Cirebon Power has signed power purchase agreement (PPA) with the state electricity company (PLN) in October 2015.

The company also awaits for the amendment of spatial planning (RTRW) of the region. However, the government has issued regulation to speed up the amendment of the spatial planning, enabling power plant developers, including Cirebon Power to speed up the environmental assessment process (AMDAL).

The expansion of the existing facility with a 1,000 MW coal-fired ultra-supercritical (USC) unit will serve as a key base-load generation asset for Indonesia’s power grid as part of the government’s 35,000 MW expansion plan.

The Owner’s consortium consists of Marubeni Corporation (Marubeni), PT Indika Energy Tbk (Indika), Samtan Co., Ltd. (Samtan), Korea Midland Power Co., Ltd. (KOMIPO), and JERA Co., Inc.

Cirebon Electric Power (CEP), started operations in 2012 as a joint venture between four companies: Komipo, Japan’s Marubeni Corporation, Korean coal selling agency Samtan and Indonesia’s PT Indika Energy.

If financial deal is signed, the company will be able to kick of the construction of the power plant immediately. Under the planned timetable, the project construction will be completed in 51 months, or in 2020.

Heru said Cirebon Power has awarded the EPC (engineering, procurement and construction) of the power plant to Hyundai, Toshiba and Mitsubishi Hitachi Power System.

The Cirebon 2 power plant will consume 3.2 million tons of coal per annum, while the existing plant consumes 2.3 million tons of coal. (*)

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