News

Indonesian Sarulla project seeking US$410 commercial loan

View in the mountains of North Sumatra (source: Flickr/ martin_canon500d, creative commons)
Alexander Richter 19 Jun 2011

Despite news on a planned takover bid by state owned utility PT PLN, the Sarulla project by PT Medco Energi, Ormat Technologies, Itochu and Kyushu Electric, have sent out draft mandate letters for the US$410 million commercial portion of the US$1.2 billion project financing.

There seem to be conflicting news on the Sarulla geothermal power project in Indonesia. While it has  been reported that State electricity utility PT PLN announced plans to take over the construction of the Sarulla geothermal power plant. The project seems to still being controlled by the group around PT Medco Energi Internacional, Ormat Technologies, Itochu and Kyushu Electric, with an estimated investment of about US$1 billion currently being raised.

Six banks have received draft mandate letters for the US$410m commercial portion of Indonesia’s Sarulla geothermal power project financing, banking sources said, despite the media reports on a planned takeover of the project by PT Perusahaan Listrik Negara (PLN).

The projects is likely to raise the non-commercial part of the financing around $1 billion from the Japan Bank for International Cooperation and the Asian Development Bank, said Medco’s CEO Lukman Mahfoedz, Medco’s CEO, adding it expects the first 1×110 megawatt geothermal project will start operation in 2014.

Six banks that received draft mandate letters for the commercial part of the project financing are expected to be officially mandated soon, banking sources said, despite media reports of a planned takeover of the project by state electricity firm PT PLN.

Source: IFR Asia