China Eximbank provides $293.2 million loan for 630MW Pacitan Power Plant Construction Project

Project narrative

On July 17, 2009, China Eximbank and Perusahaan Listrik Negara (PLN) — an Indonesian state electricity distribution company — signed a $293,226,064 loan agreement for the 630MW Pacitan Power Plant Construction Project. The loan carried the following terms: a 15-year maturity, a 3 year grace period, and an interest rate of 6-month LIBOR (0.981% in July 2009) + a 2.8% margin. The proceeds of the loan were to be used by the borrower to partially finance the $345 million cost of an EPC contract between PLN and a consortium consisting of Southwest Electric Power Design Institute, Hongyuan Co, Hubei Second Electric Power Construction Co and Gansu First Construction, which was signed on October 23, 2007. The purpose of the project was to install a 630-megawatt (MW) coal-fired power plant — with two 315MW generators (Unit 1 and Unit 2) — in Sudimoro District, Pacitan Regency, and East Java Province (locational coordinates: -8.2578176, 111.373558). Construction began in April 2008. Unit 1 was connected to the national grid on May 22, 2012 and it began commercial operations on June 24, 2013. Unit 2 was connected to the national grid on September 6, 2012, and began commercial operations on August 21, 2013. There have been extensive negative environmental impacts linked to the project, from loss of biodiversity and livelihoods to lack of compensation.