Asia Power Week 2017

Sessions Speakers Exhibitors Products Press Releases Floor Plan Buzz

Mandatory Partner Sponsor of PLN Subsidiary Company for IPP Development in Indonesia: Case Study 2 x 1.000 MW Jawa 7 Coal Steam Fired Power Plant (Room Amber 1)

Indonesia government will develop 35 GW to increase electrification ratio and to fulfill the future electricity demand. Around 30 GW will be allocated for IPP scheme to increase private participation in power development and also reduce PLN financial liability. Develop power plant through IPP scheme commonly using non-recourse financing and depend on lenders to achieve financial closing. In the lenders perspective to meet all requirement for financial closing means that the investor should satisfy the lender by mitigating all project risk including land acquisition, permit licenses, technology, EPC, operation and maintenance, fuel supply, worker and community around the power plant. All risks will influence the project completion date and power plant performance to secure loan repayment to the lenders. To speed up 35 GW implementation especially for IPP portion, PLN -on behalf of Indonesia Government- proposes to use mandatory partner sponsor of PLN subsidiary. This scheme will invite investor through tender process to join with PLN subsidiary to develop IPP project. PLN subsidiary as mandatory project sponsor will initiate the project through conducting feasibility study to propose in RUPTL, preparing land acquisition, conducting Environmental Impact Assessment, getting permit and license. It will increase project feasibility because some issues related to the development issues is mitigated earlier and the land already provided by the PLN subsidiary. It also speeds up to achieve the financial closing beside keeping the PLN group contribution in power plant development in Indonesia. Jawa 7 Coal Steam Fired Power Plant with capacity 2 x 1.000 MW is an example of IPP development project through PLN subsidiary mandatory sponsor. PJB -as a PLN subsidiary- is appointed as a mandatory sponsor and having 30% share in the IPP company. Financial closing was reached six (6) months after the PPA signing because some pre-development activities was done by the PJB.