Reported yesterday, the Sarulla project consortium has concluded a 30-year power purchase agreement for the 330 MW project, which is the largest of its type in the world. While Ormat reported mostly on its role for the provision of its equipment to the project, the other players provided individual statements.
The main partners to the projects are ITOCHU Copr. (25%), Kyushu Electric Power (25%), PT Medco Power Indonesia (37.25%) and Ormat Technologies, Inc. (12.7%)
These companies through the investment subsidiaries owned by each of the companies and jointly established operating company, Sarulla Operations Ltd signed the power purchase agreement (sales contract) with Indonesia’s state-owned electricity company, PT Perusahaan Listrik Negara (PLN) and PT Pertamina Geothermal Energy (PGE), a subsidiary of PT Pertamina.
The electricity sales contract includes the development of a geothermal resource concession owned by PGE in Indonesia’s Sarulla region in North Sumatra, construction of a geothermal plant with a total capacity of approximately 330 MW and sales of generated power to PLN.
This independent power producer (IPP) project is the largest single contract geothermal power project in the world, and is a core project of the second 10,000 MW acceleration program. It is expected that the funds will be secured through project financing supported mainly by the Japan Bank for International Cooperation and the Asian Development Bank. When the financial closure is completed, the construction of the plant will begin aimed at gradual commencement of commercial operation from 2016.
“The facility will be built in three stages, and is expected to be fully operational in 2018. The project will be financed by several banks, including the Japan Bank for International Cooperation and the Asian Development Bank.
PLN said it will price the electricity generated from the power plant at 6.79 cents per kilowatt hour, after a revision to a price deal struck in 2010. PLN president director Nur Pamudji said the company “hopes that the construction of this geothermal power plant can commence as soon as possible, so that it can contribute to sustainable and environmental-friendly development.”
Japanese Kyushu Electric Power states that this will be “the first time a Japanese power firm undertakes geothermal power sales overseas”.