China Eximbank provides $1.26 billion loan for 1240MW Bangko Tengah (SS-8) Mine Mouth Power Plant Construction Project (Linked to Project ID#69235)

On May 24, 2018, China Eximbank and PT Huadian Bukit Asam Power (HBAP) — a special purpose vehicle and joint venture between PT Bukit Asam Tbk (45% ownership stake) and China Huadian Hong Kong Company Ltd (55% ownership stake) — signed a $1.26 billion loan agreement for the 1240MW Bangko Tengah (SS-8) Mine Mouth Power Plant Construction Project. The loan carries the following borrowing terms: a 15-year maturity, a 5 year grace period, and an interest rate of LIBOR + a 2.85% margin. The $1.59 billion project is being implemented as an Independent Power Project (IPP) and financed according to a 75:25 debt-to-equity ratio. The transaction also appears to be backed by a Sinosure credit insurance and/or investment insurance policy. The purpose of the project is to construct a 1,240 megawatt (MW) coal-fired power station — with two 620MW generators (Unit 1 and Unit 2) — near the Tanjung Enim coal mine in South Sumatra Province (exact locational coordinates: -3.838679, 103.804133). The project site is located 2 km away from the Central Banko coal mine in Muara Enim, South Sumatra, Indonesia. The power plant’s coal-fired power generation units will be equipped with a super-critical boiler along with a high-efficiency steam turbine and a generator. The plant will also be fitted with a flue gas desulphurisation (FGD) system to control emissions.The Sumsel-8 power plant will consume up to 5.4 million tonnes (Mt) of coal a year, which will be sourced through a 1.5km-long enclosed conveyor belt from the Banko Tengah coal mine operated by PTBA in the Tanjung Enim area. The project also involves the construction of a 45 km transmission line from the power plant to the PLN substation in Muara Enim. On November 7, 2015, South Sumatra Governor Alex Noerdin attended a groundbreaking ceremony at the project site. Then, on October 19, 2017, HBAP signed a 25-year power purchase agreement (PPA) with Perusahaan Listrik Negara (PLN), which is an Indonesian government-owned corporation that has a monopoly on electricity distribution in Indonesia and generates the majority of the country's electrical power. China Huadian Hongkong Company Ltd. is the EPC contractor responsible for implementation. Inter World Steel Mills Indonesia and Mutiara Indah Anugrah are also involved as subcontractors. Inter World Steel Mills Indonesia has provided thesteel solutions for the Sumsel-8 coal-fired power project, while the key equipment including boilers, turbines and generators were supplied by contractors based in China. Mutiara Indah Anugrah, a construction company based in Indonesia, was contracted to perform construction and installation works for the project in 2019. Construction commenced in June 2018. By the end of 2019, the project had achieved a 22% completion rate. In March 2020, the project's sponsor declared force majeure and stated that project would be delayed as a result of the COVID-19 pandemic. Unit 1 was originally expected to reach its commercial operations date (COD) in December 2021, while Unit 2 was originally expected to reach its commercial operations date (COD) in March 2022. As of November 2021, the project was 92.84% complete.

Additional details

1. This project is also known as the South Sumatra 8 Power Plant Construction Project or Sumsel-8 Power Plant Construction Project. 2. This project is linked to Project ID#69235, which captures the equity contribution from from China Huadian Hongkong Company Ltd. 3. AidData has estimated the all-in interest rate by adding 2.85% to the average 6-month LIBOR rate in May 2018 (2.50%).

Number of official sources

5

Number of total sources

28