IFC to extend $121.8 M loan to Adaro’s subsidiary
July 16, 2008
The International Finance Corporation (IFC), the World Bank`s private investment arm, is committed to extending US$121.8 million in loan to PT Makmur Sejahtera Wisesa, a subsidiary of publicly-listed energy company PT Adaro Energy.
“The loan will be used to build and operate a mine mouth coal-fired power plant with a capacity of 60 MW in Indonesia`s South Kalimantan province,” Adaro Corporate Secretary Andre Mamuaya said on Tuesday.
The power plant is expected to sell electric power to PT Adaro Indonesia (Adaro) under a 13-year power purchase contract, he said.
“The power plant also plans to sell an excess of its electric power to local electricity networks and other consumers,” he said.
“IFC is committed to extending a loan of US$25 million and, along with five major banks of international reputation — ING Bank, Calyon, DBS, KBC Bank and Cordiant Capital — is preparing a syndicated loan of US$96.8 million,” he said.
Under the contract, Adora will supply coal to and buy electric power from the power plant scheduled for completion in 2010.
The coal demand from the power plant is expected to encourage Adora to increase its coal production capacity to 80 million tons in each of the next five years from the current 40 million tons.