CDB contributes $131 million to $261.8 million syndicated loan for 630MW Rembang Power Plant Construction Project

On December 3, 2008, Perusahaan Listrik Negara (PLN) — an Indonesian state electricity distribution company — signed a $261.8 million syndicated loan agreement with China Development Bank (CDB) and Barclays plc (a British multinational investment bank and financial services company) for the 630MW Rembang Power Plant Construction Project. CDB contributed $131 million. The loan carried the following terms: a 13-year maturity, a 3 year grace period, and an interest rate of 6-month LIBOR (2.178% in December 2008) plus a 3.25% margin. The loan’s final maturity date was December 3, 2021. The proceeds of the loan were to be used by the borrower to finance 85% of the $338.8 million cost of an EPC contract between PLN and a consortium [consisting of Zelan Holdings (M) Sdn Bhd (Zelan), PT Prinamaya Djan International, and Tronoh], which was signed on March 21, 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 Taharang Village, East of Rembang City, Central Java Province (exact locational coordinates: -6.636, 111.4749). The Zelan-Primanaya-Tronoh consortium was the general EPC contractor responsible for implementation. However, it subcontracted Dongfang Electric Corporation to provide the power generators. A project commencement (pole erection) ceremony took place on September 19, 2007 and the project was originally expected to reach completion in December 2009. However, the project encountered significant implementation delays. Unit 1 ultimately reached its commercial operations date (COD) on October 26, 2011 and Unit 2 reached its COD on January 25, 2012. Dongfang Electric Corporation and Zelan later entered litigation over a payment dispute. On July 12, 2019, Zelan announced that Dongfang Electric Corporation had obtained an Arbitration Award on July 11, 2019 against it through the Singapore International Arbitration Center. Then, on June 17, 2020, Zelan received a court order dated February 24, 2020 (“Court Order”) — obtained by Dongfang Electric Corporation pursuant to Section 38 of the Arbitration Act 2005 and Order 69 Rule 4 and Order 69 Rule 8 of the Rules of Court 2012 — that the Arbitration Award be recognized and binding and be enforced by entry as a judgment in the following terms: (a) Zelan shall pay Dongfang Electric Corporation the sum of USD 1,146,000.00, with interest thereon at the rate of 4.7709% per annum from 3 July 2018 until the date of payment; (b) Zelan shall pay Dongfang Electric Corporation the sum of USD 122,945.70 being late payment interest for the period from 19 November 2015 to 2 July 2018; (c) Zelan shall pay Dongfang Electric Corporation’s legal costs and expenses incurred in the Arbitration fixed at SGD 103,000.00; and (d) Zelan shall bear the costs of the Arbitration as determined by the registrar in the amount of SGD 64,891.35.

Additional details

1. This project is also known as the Rembang 2×315MW Power Plant Construction Project, the Rembang 2×300MW Power Plant Construction Project and the PLTU 1 Jateng Rembang Power Station Construction Project. The Chinese project title is 南望电厂Rembang TPP Project, 2x315MW. The Indonesian project title is Proyek PLTU 1 Jawa Tengah. 2. This project was part of the fast-track program by Indonesian Government to add power plants around the country, which totaled to about 10,000 MW.

Number of official sources

11

Number of total sources

19