Siemens and PowerGen to invest in Paiton II

Siemens and PowerGen to invest in Paiton II

JAKARTA (JP): Siemens Power Ventures GmbH and PowerGen signed the financing documents for the US$1.7 billion Paiton II power plant in London yesterday, Siemens announced recently.

In a statement made available yesterday, Siemens said the 1,220 megawatt coal-fired power project to be located in Paiton, East Java, is owned by PT Jawa Power, a joint venture of Siemens Power Venture who owns 50 percent of the company, PowerGen 35 percent and PT Bumipertiwi Tatapradipta 15 percent.

On April 3, 1995, Jawa Power signed the power purchase agreement with state-owned electricity company PT PLN which requires PLN to buy the power under a 30-year contract.

The agreement also set a one-year deadline for financial close.

Siemens said yesterday that an international bank consortium led by Credit Suisse and including Kreditanstalt fuer Wiederaufbau, Dresdner Bank, Sanwa Bank and Toronto Dominion Bank will provide loans totaling $1.36 billion.

The bank group will also include institutional investors led by Teachers and Prudential Insurance Co., while J.P. Morgan will act as the investors' financial adviser.

Siemens Power Generation Group will lead the construction group, which also includes Combustion Engineering Inc. of Connecticut and Black & Veatch Construction Inc of Kansas City, Missouri.

Reuters quoted the company as saying that the first of two 610-megawatt blocks will go on the grid in 1999, and the second in the following year.

PowerGen will operate and maintain the plant. The coal will be provided under long-term contracts from two mining companies in Kalimantan. (08)