P.T. Paiton Energy Company

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MIGA issued a $50 million guarantee to Capital Indonesia Power I C.V., an affiliate of General Electric Capital Corporation of the United States (GE), for its $61.2 million equity investment in the construction and operation of two 615-megawatt coal-fired electricity-generating plants in Indonesia. MIGA's guarantee covers the risks of currency transfer and war and civil disturbance. The plants will be located at the Paiton Power Generating Complex, and the power output will be sold to the government-owned electricity corporation. The project will create more than 260 permanent jobs. In addition, approximately 2,500 people will be employed during the construction phase, and GE will create housing for up to 550 employees and their families. All employees will receive substantial technical and managerial training. Existing roads will be improved and telephone service upgraded. The long-term employment benefits created by the construction and operation of the plants will enhance the quality of life for the project's workers, their families, and the local business community. By increasing the availability of electricity, the project will have a significant positive impact on Indonesia's economy. Frequent power shortages inhibit the country's economic development. Moreover, only about one-third of its households are connected to the electricity grid. Indonesia will also benefit from the project's utilization of nonexportable coal reserves, which will further develop the coal industry and allow the country to maintain its oil export levels.

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