Sarulla project hires 6-bank consortium for US$410 loan

Sarulla project hires 6-bank consortium for US$410 loan Mount Kerinci, Sumatra, Indonesia (source: Tom Casadevall, commons/ wikimedia)
Alexander Richter 18 Aug 2011

The consortium of Ormat, Kyushu Electric Power Co., Itochu Corp and PT Medco Energi Internasional has hired a six bank consortium to arrange a 20-year project finance loan for up to US$410 million.

Reported earlier this week by Bloomberg, the joint venture formed around the Sarulla geothermal power project in Indonesia has announced hiring six banks to arrange $410 million in a project finance facility.

The banks hired are: Bank of Tokyo-Mitsubishi UFJ Ltd., ING Groep NV (INGA), Mizuho Corporate Bank Ltd., National Australia Bank Ltd. (NAB), Societe Generale (GLE) SA and Sumitomo Mitsui Banking Corp. These banks will market the 20-year project finance facility to other lenders.

Without much further details available, Bloomberg reports a margin of 200 basis points (2% interest rate) on top of the London Interbank offered rate.

“The Sarulla power project will require total financing of $1.26 billion, and it is expected that a further $600 million will come from the Japan Bank for International Cooperation while another $250 million will be lent by the Asian Development Bank.

The project is developed by a consortium of PT Medco Energi Internasional, Ormat Industries (ORMT) Ltd. and Japan’s Itochu Corp. (8001), that together won a contract in 2006 to construct and operate the 340-megawatt geothermal power plant, which will be located in Sumatra, an island in the Southeast Asian nation’s north.

In 2007, Kyushu Electric Power Co. signed an agreement to join the group.

Upon completion, the plant will be the largest single- contract geothermal power project, according to information about the project located on the ADB’s website.

PT Perusahaan Listrik Negara, Indonesia’s state-owned electricity company, signed an agreement with Medco Energi to buy electricity from the plant under a 30-year contract, Listrik Negara President Director Dahlan Iskan said in April last year.”

Source: Bloomberg