Paiton III Thermal Power Plant

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Paiton III Thermal Power Plant is a 815 MW coal-fired power generation plant to be located 150 kms southeast of Surabaya, the capital of East Java. The project was an expansion of Paiton I, a 1230MW coal fired power plant which reached financial closure in 1995 and became operational in 1999. PT Paiton Energy, the project company that developed Paiton I, was also the company in charge of building and operating the Paiton III thermal power plant. PT Paiton Energy had the exclusive right to negotiation the power purchase agreement for Paiton III since the 1990s. As of Dec. 31, 2008, the major shareholders in PT Pation Energy were IPM Eagle LLP (UK, 45%), a 70:30 joint venture between International Power PLC and Mitsui & Co. Through this partnership, Mitsui & Co. had a 50% effective share in PT Paiton Energy, while International Power had a 31% share in the project company. The remaining shareholders in PT Paiton Energy were Tokyo Electric Power Co. (Japan, 14%) and PT Batu Hitam Perkasa (Indonesia, 5%). PT Paiton Energy signed a 30 year power purchase agreement (PPA) with PT PLN Persero, Indonesia's state-owned power utility company to sell all the power produced by Paiton III in July 2008 which included a power sales tariff of $42/MWh. The 30 year contract period was to commence from the operational date of the project. The project planned to use supercritical-pressure coal-fired power generation which has higher power generation efficiency than subcritical-pressure power generation and is capable of reducing coal consumption relative to power output, which results in lower carbon dioxide (CO2) emissions. The project total cost of Paiton III was estimated to be US$1,519 million. The project reached financial closure on March 8, 2010 when PT Paiton Energy signed a US$1,215 million project financing agreement with the Japan Bank for International Cooperation (JBIC) and eight commercial banks. Project construction started in 2009 and the plant was expected to be fully operational in 2012. The project became fully operational in June 2012. M2 Presswire, Paiton 3 plant in Indonesia Starts Commercial Operation, 27 March 2012.