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Indonesia / Loan Insurance for Expansion of Tanjung Jati B Ultra-supercritical Coal Fired Power Plant


February 27, 2017

Nippon Export and Investment Insurance

Nippon Export and Investment Insurance (NEXI) has decided to provide loan insurance to support an expansion project of Tanjung Jati B ultra-supercritical coal fired power plant.

The purpose of the project is to expand Tanjung Jati B coal-fired power plant (Unit 1 to 4, total capacity of 2,640MW) owned by Sumitomo Corporation in Jepara, Central Java. Construction of new units (Unit 5 and 6) will be undertaken through PT Bhumi Jati Power (“BJP” ※) which has been founded jointly by Sumitomo Corporation, Kansai Electric Power Co. Inc. and PT. United Tractors Tbk (“UT”), a member company of Indonesia’s largest conglomerate Astra Group. The project is planning to build a new 2,000MW (net 1,000MW x 2 units) ultra-supercritical power plant adjacent to the existing Unit 1 to 4. Through BJP, Indonesian national electricity power company PT PLN (Persero) will receive power supply as well as plant operation and maintenance service for 25 years after the commencement of commercial operation.
※ BJP is owned by Sumitomo (50%), Kansai Electric (25%) and UT (25%).

As the main equipment of the plant, a boiler of Mitsubishi Hitachi Power Systems, Ltd. and a turbine of Toshiba Corporation are expected to be installed. In addition to such state-of-the-art ultra-supercritical technology of Japanese manufacturers, Kansai Electric will also fully support the plant operation with its years of experience in operating Japanese power plants using the ultra-supercritical technology. As a successful project making the fullest possible use of Japanese support in the form of technology, project development and management as well as financing support, the project is expected to realize power development that is more efficient and environment-friendly compared with existing sub-critical coal-fired plants.

The project is also in conformity with the intent of “Partnership for Quality Infrastructure” announced by Japanese Prime Minister Shinzo Abe in May 2015, which aims for the realization of sufficient Japanese infrastructure investment in Asian countries in terms of both quality and quantity. NEXI’s support for this project fits with its own service enhancement measures to further encourage the use of private-sector fund and know-how in the development of Japanese business activity in the global market.

To meet the anticipated demand for electricity, Indonesia is planning to develop 35GW power generation capacity by 2019 to stabilize power supply. As base load power plant which plays a central role in this plan, the plant is expected to contribute to social and economic development in Indonesia through stable and environment-friendly power supply by using coal produced in the country.

Under this project, BJP is planning to raise approximately USD 3,355 million by project financing. In the form of co-financing with Japan Bank of International Cooperation (JBIC), seven Japanese commercial lenders are going to provide loans, and NEXI will provide insurance to support them. The seven lenders are Mizuho Bank, Ltd., the Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Trust and Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, the Norinchukin Bank, and Oversea-Chinese Banking Corporation Limited Tokyo Branch.

NEXI will continue to actively support Japanese overseas business and infrastructure development in the Asian countries.

(Reference)
Insured Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Mitsubishi UFJ Trust and Banking Corporation
The Norinchukin Bank
Oversea-Chinese Banking Corporation Limited Tokyo Branch
Insurable Value Approx. USD 1,678million
Tenor Approx. 23 years
Covered Risks Political Risk 100%, Commercial Risk 90% (Project Company)

Contact:
Structured and Trade Finance Insurance Department  Phone: (0)3-3512-7670

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