PT Jawa Power

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In 1995 PT Jawa Power began the development of the 1,220 MW (2x615-MW) Painton II power plant in Paiton, East Java. Jawa Power was distinct from the more well known Paiton I developed by the Paiton Energy Company and was also located in Paiton, East Java. The Jawa plant was being developed through a 30-year BOT-scheme that was to take effect after construction had been completed. The plant was to sell power to Perushaan Listrik Negara (PLN, the state-owned electricity utility) under a power purchase agreement signed in 1995. The plant would be fueled by coal purchased through a supply agreement with PT Kideco Jaya and PT Berau Coal. The plant would be operated by Powergen subsidiary JPT Powergen Jawa Timur. Jawa Power was a joint venture between Siemens Power Ventures (50%), a subsidiary of Siemens AG (Germany), PowerGen Plc (UK, 35%) and PT Bumipertiwi Tatapradipta (15%), which was controlled by the PT Bimantara Citra Group (Indonesia). In 2004, PT Bumipertiwi Tatapradipta, exercised its preferential purchase rights to purchase PowerGen’s 35% stake, which it immediately sold on to Malaysian power company YTL Power for US$139 million. YTL also gained operating rights of the plant as part of the deal. The Jawa Power plant was being financed from a mixture of syndicated loans, export credits and sponsor equity. The project had a debt/equity ratio of roughly 80:20. Siemens, Black & Veatch, and ABB Combustion Engineering were project contractors and Siemens was the main equipment supplier. ABB Combustion Engineering was to deliver boilers for the project. The project was expected to become operational during 1999. The government put on hold many of the independent power producer projects in late 1997 as part of the retrenchment program to cope with the economic crisis. PLN, which was financially troubled by the crisis, asked to renegotiate the PPAs, especially with regards the price. In 2003, 14 of the 26 IPPs, including PT Jawa, agreed to continue their projects under a new pricing scheme, while seven agreed to terminate the PPAs. The government and PLN each agreed to take over two projects. None None