Bank of China provides $371.5 million buyer’s credit loan for 700MW Tanjung Awar-Awar Power Plant Construction Project

Project narrative

On December 14, 2009, Bank of China (BOC) and Perusahaan Listrik Negara (PLN) — an Indonesian state electricity distribution company — signed a $371,509,145 buyer’s credit loan agreement for the 700MW Tanjung Awar-Awar Power Plant Construction Project. The loan carried the following terms: a 13-year maturity, a 3 year grace period, and an interest rate of 6-month LIBOR (0.453% in December 2009) + a 2.3% margin. The loan’s final maturity date is in December 2022. The borrower also purchased buyer’s credit insurance from Sinosure. The proceeds of the loan were to be used by the borrower to partially finance the $588 million cost of an EPC contract between PLN and a consortium consisting of China National Machinery Equipment Corp. (Sinomach), China National Electric Equipment Corp. (CNEEC), and a local company, PT Penta Adi Samudra, which was signed on April 25, 2008. Bank Negara Indonesia and Bank Rakyat Indonesia also issued loans worth $101.92 million in support of the project. The purpose of the project was to install a 700-megawatt (MW) coal-fired power plant — with two 350MW generators (Unit 1 and Unit 2) that are directly cooled by seawater — in Wadung Village, Jenu District, Tuban Regency, and East Java Province (locational coordinates: -6.8105242, 111.9955033). Unit 1 began implementation in December 2009 and opened in December 2012 and Unit 2 commenced operations in October 2013. The project achieved its commercial operations date (COD) in February 2014. The project owner (PLN) issued a Takeover Certificate (TOC) for Unit 2 on September 22, 2016.