Cirebon Coal-fired Power Plant

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Cirebon Electric Power Company was created to build and operate Cirebon coal-fired plant, a 660 MW plant in Ciberon, West Java, Indonesia. Cirebon Electric Power Company was awarded the project via a competitive tender in May 2006. The company was owned by Marubeni (32.5%), Korea Midland Power Co or Komipo (27.5%), PT Tripatra Engineers & Constructors (20%), Samtan Inc (20%). The project sponsors signed a 30 year Power Purchase Agreement (PPA) with Indonesian state-owned power utility PT PLN in August 2007. The PPA required financing to be in place within 12 months from signing, but the project failed to achieve it. The main reasons for the inability to raise financing were the concerns regarding the risk allocation in the project, particularly whether the government would guarantee the PPA in the case of force majeure. There was a question over what entity was responsible for maintaining the transmission line connecting the power plant to the grid. The issues over risk allocation were solved by May 2009. The Government of Indonesia committed to support payment obligations of PLN under this contract. The project held a 30 year PPA with PT PLN, signed in August 2007. The project was tendered in 2005 and awarded to the developer in May 2006, which offered US$43.63/MWh. The EPC contract was awarded to Doosan Heavy Industries & Construction Company (South Korea) valued at US$540 million. The total project cost was estimated to be US$850 million. That was 10% higher than the initial estimates due to changes in the technology to make the plant more coal efficient and environmentally friendly. The project reached financial closure in March 2010. The debt financing came from a US$595 million loan which was arranged by JBIC (60%) and Korea Exim Bank (40%). They also provided Partial Risk Guarantees (PRG) to the commercial banks covering 40% of each. The co-financers were Japanese banks BTMU, ING Bank, Mizuho Corporate Bank and SMBC, and INGBank. The construction of the power plant started in early 2010 and the plant expected to be commissioned by December 2011. The project became eventually operational in November 2012.