Bank Bukopin and four regional development banks pledged Tuesday to syndicate a loan to PT Equator Manunggal Power for the construction of a 60 megawatt (MW) coal-fired power plant in Pontianak, West Kalimantan.
The project, which will cost Rp 545 billion (US$59.9 million), is aimed at reducing the power deficit in the area.
Bukopin director of commercial affairs Mikrowa Kirana said the five banks would provide a total loan of Rp 365 billion, which would be used to develop the plant and purchase coal.
He said Bank Bukopin would loan Rp 135 billion and Bank Jatim of East Java, Rp 100 billion. The remaining funds will come from Bank DKI of Jakarta, Bank Kaltim of East Kalimantan and Bank Kalbar of West Kalimantan, which pledged Rp 75 billion, Rp 45 billion and Rp 10 billion, respectively.
The other Rp 180 billion needed to proceed with the project will be financed by Equator's own internal account.
Mikrowa said the development is part of efforts to overcome the electricity crisis in West Kalimantan, especially in the province's capital, Pontianak.
"Electricity crisis in West Kalimantan has reached a very crucial level. The province seriously needs the (planned) power plant," Mikrowa said. He said it was the second time Bukopin had taken part in a power plant development project -- the first project was the development of a plant in East Kalimantan.
The new power plant, whose foundation was completed last November, is slated to start operating commercially in 2010.
Joko Winarno of Equator said firing the power plant with coal would hopefully reduce the cost of electricity generation.
"Currently the government bills electricity usage at an average of Rp 500 per kilowatt hour, while the operation costs average at Rp 2,500 per kilowatt hour. Hopefully the government will be able to reduce the electricity subsidy when the plant operates," Joko said.
Based on a 2007 agreement between Equator and state electricity firm PT Perusahaan Listrik Negara (PLN), Equator will sell the electricity it produces to PLN for a 25-year period. (uwi)
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