CDB provides $150 million loan for 100MW Kendari-3 Power Plant Construction Project

On June 3, 2016, China Development Bank signed a $150 million term loan facility agreement with PT DSSP Power Kendari (DSSP PK) — a project company and subsidiary of PT Dian Swastatika Sentosa — for the 100MW Kendari-3 Power Plant Construction Project. This loan carried a 12-year maturity, but its interest rate and grace period are unknown. The loan was collateralized by, among other things, fiduciary securities on insurance claims, receivables incurred in relation to a power purchase agreement (PPA) between DSSP PK and Perusahaan Listrik Negara (PLN), and DSSP PK’s movable assets and land. PT Dian Swastatika Sentosa and PT Sinar Mas Tunggal (SMT) also issued corporate guarantees in support of the loan. The loan's outstanding amount was $65,842,705 as of December 31, 2017 and $98,760,737 as of September 30, 2018. The $200 million project was implemented as an Independent Power Project (IPP) and financed according to a debt-to-equity ratio of 75:25. CDB provided $150 million of debt financing and Sinar Mas Group made a $50 million equity contribution. The purpose of the project was to install a 100-megawatt (MW) coal-fired power plant — with two 50MW generators (Unit 1 and Unit 2) — in Tanjung Tiram and Wawatu Village, North Moramo District, South Konawe Regency, Southeast Sulawesi Province (exact locational coordinates: -4.0512916, 122.6534484). China Gansu International Corporation for Economic and Technical Corporation was the engineering, procurement, and construction (EPC) contractor responsible for implementation. However, Jiangxi Jianglian International Engineering Co. Ltd. also served as an equipment supplier (subcontractor). On July 14, 2015, DSSP Kendari had signed an equipment supply contract with Jiangxi Jianglian International for a contract price of $80,900,000. A groundbreaking ceremony was held on September 8, 2016. As of September 2017, construction was 56% complete. Then, in July 2018, PT Dian Swastatika Sentosa announced that construction was 90% complete. In April 2019, PT Dian Swastatika Sentosa announced that the power plant was preparing to begin commercial operations. The power plant reportedly began commercial operations on or around October 27, 2019.

Additional details

1. The Indonesian project title is Proyek PLTU Kendari 3. The project is referred to as 印尼肯达里三期2×50MW燃煤电厂项目 in Chinese. 2. PT Dian Swastatika Sentosa is a private Indonesian company. PT Sinar Mas Tunggal (which is owned by the Sinar Mas Group) holds a 59% ownership stake in PT Dian Swastatika Sentosa. 3. Perusahaan Listrik Negara (PLN) is an Indonesian state electricity distribution company. 4. The CDB loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 5. The project is coded as having mixed intent as it is a USD-denominated facility used to finance commercial supply and EPC contracts with Chinese companies, which resembles that of an export buyer's credit.

Number of official sources

6

Number of total sources

11