PT Medco Sarulla Geothermal Plant

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PT Medco Energi International Tbk led a consortium (27.5%)comprising of Japan's Kyushu electric Power Corp (25%), Itochu corp (25%) and the US company ORMAT Industries (12.75%), in the development of a 340 MW geothermal project to be located in Northern sumatra, Indonesia. The project was to be constructed in two 110 MW and one 120 MW phases. ORMAT would supply the turbines for the project. PT Medco Power Indonesia received an equity investment of $25 million for the expansion of operations. The decision was approved in February 2012, and invested in March 2012. The project was contracted to sell power to state utility PLN under a 30 year PPA with a price of power of USD 0.0697/kWh. total project cost was estimated at USD 1.6 billion. In August 2011, the project reached financial close when six banks, Bank of Tokyo-Mitsubishi UFJ Ltd., ING Groep NV (INGA), Mizuho Corporate Bank Ltd., National Australia Bank Ltd. (NAB), Societe Generale (GLE) SA and Sumitomo Mitsui Banking Corp were selected to syndicate a USD 410 million loan for the project. It was reported that pricing for the loan was to be 200 basis points above the London Bank Inter-Offer Rate. Further financing was to come from the the Japan Bank for International Cooperation for USD 600 million and the Asian Development Bank for USD 250 million - approved October 2011. The remainder USD 310 million was expected as an equity contribution form the sponsors. Expected final commissioning for the three phases was for 2016. However, the commercial loan's financial closure was not yet reached due to disagreements between PLN and PT Medco over the underlying securities of the debt, concluded in May 2012. Financial closure was now expected for late-2012. The six banks were selected from 10-11 submissions to an RFP for the project. JBIC also provided an EPRG on the commercial loan. In March 2012, the IFC acquired 11% equity share in the developer PT medco Power, at a value of US$112 million. This was done via a consortium led by Saratoga Capital. http://thinkgeoenergy.com/archives/8317 http://www.power-technology.com/projects/sarullgeothermalpowe/ See: http://thinkgeoenergy.com/archives/9878 for PPP info http://www.ifc.org/ifcext/spiwebsite1.nsf/ProjectDisplay/SPI_DP31462 http://www.bloomberg.com/news/2011-08-10/sarulla-consortium-hires-banks-for-410-million-geothermal-loan.html AUGUST 2012: MOST PROBABLY DID NOT REACH FINANCIAL CLOSURE YET: APPOINTED BANKS IN AUGUST 2011, NOT CLOSURE. THIS IS EXPECTED IN LATE-2012.