Bank of China contributes $122.4 million to overseas investment loan for Phase 1 of 244MW Sorik Marapi Geothermal Power Plant Construction Project (Linked to Project ID#62261)

On December 8, 2016, Zhejiang Kaishan Compressor Co., Ltd (Kaishan) and Zhejiang Branch of China Eximbank signed a loan intention agreement for Phase 1 of 244MW Sorik Marapi Geothermal Power Plant Construction Project. Then, in October 2017, PT Sorik Marapi Geothermal Power (SMGP) — a special purpose vehicle that is majority owned by KS Orka — signed a $244.8 million overseas investment loan (境外投资贷款) agreement with Bank of China and China Eximbank for Phase 1 of Sorik Marapi Geothermal Power Plant Construction Project. Bank of China contributed $122.4 million (captured in Project ID#69599) and China Eximbank contributed $122.4 million (captured in Project ID#62261). The maturity of the loan was 10 years. However, its interest rate and grace period are unknown. This project involved the construction of a 3 x 80MW geothermal power plant in Sibanggor Julu Village, Puncak Sorik Marapi District, Mandailing Natal Regency, and North Sumatra Province. Phase 1 of the project involved the installation of 126MW power generation capacity. PowerChina was the EPC contractor responsible for implementation. Zhejiang Kaishan Compressor Co., Ltd (Kaishan) was also involved in project implementation. On October 16, 2016, drilling operations commenced. Construction of the first phase was completed on June 6, 2018. Unit 1 achieved its commercial operations date (COD) and supplied electricity to the PLN’s Panyabungan substation on 28 September 2019. The electricity connection from the power plant to the main substation of PT PLN (Persero) was officially inaugurated on February 13, 2020. Then, in January 2021, a high-pressure burst of gas from one of the geothermal wells killed five people, including babies, and injured 24 other people. Nearly 20 villagers were hospitalized. The gas leak happened when employees of Kaishan were commissioning a geothermal well. Shares of Kaishan plunged after the hydrogen sulfide leak.

Additional details

1. This project is also known as Phase I of the 3 x 80MW Sorik Marapi Geothermal Power Plant Project and the SMGP 240MW Geothermal Power Project Phase I Project. The Chinese project title is SMGP地热开发项目. 2. KS Orka Renewables Pte Ltd (KS Orka) is a Singapore-based joint venture between Hugar Orka ehf, an Icelandic company and Zhejiang Kaishan Compressor Co., Ltd (Kaishan). KS Orka acquired a 95% ownership stake in SMGP from OTP Geothermal (a joint venture between Origin Energy and Tata Power) in August 2016.

Number of official sources

7

Number of total sources

18