Fitch ratings affirms Star Energy Geothermal Wayang Windu rating

Wayang Windu Unit II, West Java, Indonesia (source: Aecom)
Alexander Richter 31 Jan 2012

Fitch Ratings affirms rating for Star Energy Geothermal (Wayang Windu) Limited providing details about the changed development plans of the company for the Wayang Windu project in Indonesia.

In a release yesterday, “Fitch Ratings has affirmed Star Energy Geothermal (Wayang Windu) Limited’s (SEG) Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’. The Outlook is Stable. At the same time, the agency has affirmed SEG’s USD350m senior secured notes due in 2015 at ‘B+’ with a recovery rating of ‘RR4’.”

“SEG has operated at an average capacity factor of above 97% since commencement of operations in 2000, which compares quite favorably with the global geothermal power industry average. Its energy sales are based on a long term contract with the state power utility, PT Perusahaan Listrik Negara, which provides for tariff adjustments for movements in exchange rates and inflation.

SEG is exposed to geological risks inherent to operating in an active seismic area, and its single site operation further augments this risk. Fitch however notes that this risk is mitigated to some extent as SEG’s insurance policies cover most plant costs, as well as 24 months of business interruption.

SEG has scaled down its capex for Unit 3. As per the revised plan, Unit 3 will now consist of 60MW of generation capacity (127MW originally) and is estimated to cost around USD190m (USD90m lower than the original capex budget). Fitch however notes that an EPC contract for the construction of Unit 3 is still not in place, and the company is still in the process of verifying sufficient thermal resources to support Unit 3’s additional capacity. The company expects to award the EPC contract, following verification of sufficient thermal resources, by end-2012. ”

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Source: Reuters