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)