Patuha Power Ltd.

cancelled

The 400MW, US$650.0 million Patuha Geothermal Power Plant was to be developed by the Patuha Power Co (PPC) a consortium of a CalEnergy (88%) and Mahaka Energy Ltd. (12%) through a 30-year BOT. Exploration commenced in the Patuha field in 1996. The first phase of the project (a 80-MW unit) reached financial closure in September 1997. Financing consisted of a mixture of syndicated loans, a loan facility, and sponsor equity. Some of these funds came the US$400.0 million loan facility to the CE Indonesia Funding Corporation, a special purpose company formed by CalEnergy, to finance its Indonesia projects in Patuha, Dieng and possibly four other geothermal projects. PPC and the Dieng Power Company were to issue project bonds to repay the facility. PT Kiewit Holt of Indonesia, a subsidiary of Kiewet Energy Co., were the project contractors, while CalEnergy was responsible for operation and maintenance activities. PPC signed a 30-yr PPA with the national utility, Perushaan Listrik Negara (PLN) in 1995. The company was working on the construction of the first 80 MW in March 1998, when PLN failed to pay for the electricity provided by Dieng Geothermal Power Plant, the other CalEnergy's project in the country, 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 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 September 2001, the government agreed that it would start in 2004 paying by installments a US$260 million claim by the OPIC. Payments were to be made by installments in 11 years. 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. None None