BOC, ICBC, CDB, CCB, China Citic contribute $423 million to syndicated buyer’s credit loan for 990MW Jabar Indramayu Power Plant Construction Project

On May 27, 2008, Perusahaan Listrik Negara (PLN) — an Indonesian state-owned electricity company — signed a $592 million syndicated buyer’s credit loan agreement with a group of Chinese and non-Chinese banks for the the 990MW Jabar Indramayu Power Plant Construction Project. The loan carried the following borrowing terms: a 3-year grace period, a 13-year maturity, and annual interest rate of 6-month LIBOR (2.856% in May 2008) plus a 0.785% margin. The final maturity date of the loan is May 27, 2021. The borrower purchased buyer’s credit insurance from Sinosure, covering 95% of the loan. Indonesia’s Ministry of Finance also issued a sovereign guarantee in support of the loan. Members of the loan syndicate included Bank of China, BNP Paribas, China Construction Bank, China Development Bank, ICBC, Société Générale, China Citic, ANZ Bank, Bayerische Landesbank, Calyon, Credit Suisse, Fortis, ING, Natixis, RBS, WestLB, Mizuho, and Sumitomo Mitsui Banking Corporation (SMBC). Bank of China, China Construction Bank, China Development Bank, ICBC, and China Citic jointly contributed an estimated $423 million. The proceeds of the loan were to be used by the borrower (PLN) to finance 85% of the cost of a $696.73 million commercial (EPC) contract. The remaining 15% of the contract cost was to be provided in local currency financing arrangements by Indonesian banks. The purpose of the project was to construct a 3x330 MW coal-fired steam power plant on a 83-hectare site in Sumur Adem Village, Sukra District, Indramayu Regency, West Java Province (exact locational coordinates: -6.2747375, 107.9704303). The power plant required the installation of three 1050t/h subcritical boilers and three 330MW turbo-generator units, which were to be cooled down directly by seawater. China National Machinery Industry Corporation, the China National Electric Equipment Corporation and PT Penta Adi Samudera were the contractors responsible for implementation. Construction began in 2007. The 1st and 2nd unit of the 3x330MW power plant started commercial operations in January 2011 and May 2011, respectively, while the 3rd unit passed performance testing in September 2011. The plant officially opened on October 12, 2011. It was part of the fast-track program by Indonesian government to add power plants around the country, which total to about 10000 MW. In December 2014, Indramayu Regency officials alleged that a former Regency government official, Irianto M.S. Syafiuddin, had embezzled 4.1 billion Rupiah, or about $300,000, in the land acquisition process for the Indramayu plant in 2004.

Additional details

1. This project is also known as the 990MW PLTU 1 Jabar Indramayu Power Plant Project and the Indramayu Sumuradem Power Station. The Chinese project title is 印度尼西亚INDRAMAYU 3X330 MW火力发电项目. 2. According to IJGlobal, each of the Chinese state-owned financiers provided $84.6 million. The transaction amount is captured as $84.6 million x 5 = $423 million to capture the financing from Bank of China, China Construction Bank, China Development Bank, ICBC, and China Citic. 3. In the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, it identifies this project as being supported by a $562 million China Development Bank loan. However, this estimate seems implausible given that there were 18 members of the loan syndicate (including four additional Chinese state-owned banks).

Number of official sources

6

Number of total sources

36