China Eximbank provides $240.9 million preferential buyer's credit for 200MW Takalar Steam Coal Power Plant Construction Project

Project narrative

On December 22, 2014, the Export-Import Bank of China signed a $240,983,647 preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC No. (2014) 35 Total No.(329)] with the Government of Indonesia for the 200MW Takalar Steam Coal Power Plant Construction Project. The PBC carried the following borrowing terms: a 3% interest rate, a 15-year grace maturity, and a 5 year grace period. Then, on March 5, 2015, the Government of Indonesia signed a $240,983,647 subsidiary loan agreement [SLA-1260/DSMI/2015] with Perusahaan Listrik Negara (PLN) — an Indonesian state electricity distribution company — for the same project. The proceeds of the loan were to be used by PLN to partially finance an EPC contract with China Gezhouba Group Corporation (CGGC). The purpose of the project was to construct a power plant — with two 100MW power generation units — in Punagaya village within Bangkala District, Jeneponto Regency, South Sulawesi Province (locational coordinates: -5.6236347, 119.550822). CGGC was the EPC contractor responsible for project implementation. Construction commenced on May 4, 2015. The first power generation unit was put into commercial operation on December 19, 2017 and commissioned on December 28, 2017. The second power generation unit was put into commercial operation on February 14, 2018 and commissioned during the same month. Then, on July 2, 2018, a project completion ceremony was held. The project was implemented smoothly, although there were licensing problems namely because of the delay of the issuance of the Liquid Waste Disposal Permit (IPLC), which was only issued by the Ministry of Environment and Forestry on February 19, 2019. Furthermore, crime negatively impacted the project, with the theft of ground cables in the switchyard area of the Punagaya Main Substation (GI) .