PT Puncak Jaya Power

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PT Puncak Jaya Power was a consortium comprised of Duke Energy (30%), Power Link Corp (30%), PT Freeport Indonesia Co (30%), and local firm PT Austindo Nusantara Jaya (10%). PT Puncak Jaya Power operates a diesel-fired power plant with an expected capacity of 194-MW. The participation of Duke Energy as the project operator resulted in the decision by PT Freeport Indonesia (a subsidiary of Freeport-McMoran Copper & Gold) to concentrate on its core mining business and therefore spin off its captive power plant into a separate company, and buy the power from the new entity. In 1994, 108-megawatts of existing generation assets from PT Freeport Indonesia were transferred to PT Puncak Jaya Power at a project cost of $100 million. PT Puncak Jaya then agreed to install an additional 70- megawatts and 16-megawatts in new capacity. The shareholders provided $54 million in equity capital and raised $107.5 million through syndicated loans. An additional $54 million was raised through a 12-year loan from Prudential Power Funding. Nichimen and Mitsubishi Heavy Industries were selected as equipment suppliers, and Imatran Voima Oy was chosen as the primary contractor for the expansion project. PT Freeport Indonesia signed a 20-year take-or-pay power offtake contract, provided broad covenants on dollar cash flow coverage, and took on completion risk. In July 2003, Duke Energy completed the sale of its 85.7% majority interest in PT Puncak Jaya Power for US$300 million, including US$222 million in project debt, to Freeport-McMoran Copper & Gold Inc.