Energy Sengkang secures loan to build power plant

Energy Sengkang secures loan to build power plant

JAKARTA (JP): PT Energy Sengkang has secured a syndicated loan
of US$178.9 million from foreign banks to build a 135 megawatt
(MW) combined-cycle power plant and develop a gas field in
Sengkang, South Sulawesi.

Company president Paul Edwards said yesterday that $138.4
million of the 14-year loan would be used to construct the power
plant and $40.5 million to develop the gas field.

He said the loan's interest rate would float according to the
London inter-bank offered rate. But he said he would give no
further details because his company was still negotiating with
Bank Indonesia, the central bank.

"The loan was arranged by BZW Asia Ltd. and Union Bank of
Switzerland," he said before signing the loan agreement.

He said the project would require a $225 million investment,
including $46.1 million in equity.

Edwards said the Sengkang power plant -- which he claimed
would be the first integrated power and gas field project in
Southeast Asia -- would start operating next August with an
initial generation capacity of 85 MW.

"We'll increase the capacity to 135 MW after a year of
operation," he said, adding that his company would manage the
plant under a 20-year build, operate and own scheme.

He said Energy Sengkang signed a power purchase agreement in
April with the state-owned electricity company PT PLN.

Under the agreement, PLN will buy electricity from the
Sengkang plant for 6.55 U.S. cents a kWh, which includes the cost
of transmission to a sub-station 32 kilometers away.

Energy Sengkang is 47.5 percent owned by Energy Equity Corp.
of Australia, 47.5 percent by Tenneco Energy of the U.S. and 5
percent by PT Trihasra Sarana Jaya Purnama, an electricity
subsidiary of Citra Lamtorogung Persada, which is owned by
President Soeharto's eldest daughter, Siti Hardiyanti Rukmana
(Mbak Tutut). (bnt)