Dieng Geothermal Power Plant

cancelled

The 400-MW (180-MW + 220-MW), US$1,000 million Dieng Geothermal Power Plant was being developed by the Himpurna California Energy Ltd., a consortium of Mid American Energy Holdings (formerly CalEnergy) subsidiary (94%), and the local firm, PT Himpurna Enersindo Abadi (6%) through a 30-yr BOT. The first phase, which consisted of 180-MW, closed financing in the fourth quarter of 1996 and consisted of a mixture of syndicated loans, a loan facility, and sponsor equity. Some of these funds were coming from the US$400.0 million loan facility to CE Indonesia Funding Corporation, a special purpose company formed by CalEnergy, to finance its Indonesia projects in Dieng, Patuha and possibly four other geothermal projects. DPC and the Patuha Power Company planned to issue project bonds to repay the facility. The US Overseas Private Investment Corp. (OPIC) provided political risk insurance for CalEnergy's equity capital. PT Kiewit Holt of Indonesia, a subsidiary of Kiewet Energy Co., and Ansaldo were the project contractors. CalEnergy was responsible for operation and maintenance activities once the first facility becomes operational. DPC signed a 30-yr PPA with the national utility, Perushaan Listrik Negara (PLN) in 1995. The company commissioned the first 60 MW in March 1998 and started working on the construction of an additional 80MW geothermal plant. However, PLN failed to pay for the electricity provided by this project due in part to the Asian finicial crisis. The unpaid amount exceeded US$60 million in March 1999 when Mid American Energy Holdings called for international arbitration on its two projects (the other one was Patuha Power Ltd.). The dispute was taken to an international arbitration panel under the United Nations Commission on International Trade Law (UNCITRAL) rules in 1999. After a favorable interim decision of the international arbitration panel, OPIC and Lloyds paid in full Mid American Energy Holdings' claims under its political risks insurance policies in November 1999. In July 2001, the Indonesian Ministry of Finance signed an agreement to pay OPIC’s claim. The terms were cited as US$400 million to be paid over 14 years at an interest of 6.21% with a 3-year grace period, broken down as US$260 million to OPIC and US$140 million to various creditors. In September 2001, the Indonesian government stated that PLN would manage the operating components of Dieng and continue construction on the unfinished components of both plants. The revenue from the plants would be used to pay OPIC and the other creditors. 14 of the 26 IPPs had agreed to continue their projects under a new pricing scheme, while seven agreed to terminate the PPAs. On August 27, 2001, Indonesian Government and OPIC representatives signed a settlement agreement transferring OPIC’s shares in the Dieng and Patuha project to the Indonesian Government. A Recommissioning Loan Agreement and Note also provided OPIC funding to recommission the Dieng Geothermal project’s 60-MW unit.