Star Energy Geothermal Salak & Darajat successfully raise $1.1bn green bond funding

Star Energy Geothermal Salak & Darajat successfully raise $1.1bn green bond funding Salak geothermal power plant, Indonesia (source: BCPG)
Alexander Richter 21 Oct 2020

PT Star Energy Geothermal has raised $1.1 billion in green bond financing for its Salak and Darajat II geothermal power plant operations in Indonesia. Proceeds are to refinance bond financing and the geothermal operations.

Star Energy Geothermal Salak, Ltd and Star Energy Geothermal Darajat II Limited, a subsidiary of PT Barito Pacific Tbk (BRPT), issued senior green bonds worth US $ 1.11 billion. This bond is divided into two tranches, US $ 320 million, with a coupon rate of 3.25%, with a term of 8.5 years (due April 2029) and US $ 790 million with a coupon rate of 4.85%, with a period of 18 years (due October 2038). The bond is listed on the Singapore Exchange Securities Trading Ltd (SGX).

For more detail, you can find the SGX link of the Bonds in the link below:

Rudy Suparman, VP Director of Barito, stated, the company continues to forge the path in a more sustainable energy sector. It will also continue to push toward investments in technologies to help reduce carbon emissions, increase sustainable energy and promoting circular economies in Indonesia, he adds.

According to Fitch, the subsidiary of Barito need fresh funds in the near future for the Life Time Extension program at the Salak and Darajat geothermal plants, after 20 years of operation. The two power plants have a combined capacity of up to 647.8 MW, of which 412.8 MW are operated by the company.

The rest is operated by state-owned power producer, PT Perusahaan Listrik Negara using natural gas supplied by the blocks. While, Moody’s Investor Service assigned a Baa3 rating with a stable outlook for the foreign currency bonds. The proceeds from the issuance will be used by the electric producer for bond refinancing and geothermal operations.

Barito targeting the electricity capacity of Star Energy, which is the largest geothermal company in Indonesia, to increase from 875 MW to 1,200 MW in the coming year. The company become the shareholders of the geothermal producer after take over 66.7 percent Singapore-based, Star Energy Group Holdings Pte. Ltd., ownerships on Dec. 12, 2017 from global energy giant Chevron Pacific.

In 2019, Star Energy deployed a drilling program at Wayang Windu in order to seek additional geothermal reserves for the expansion of the geothermal power plant. The Group controlled 60 percent of the projects and the remaining owned by Electricity Generating PCL (EGCO) and Mitsubishi Corporation.

Source: Insider Stories, Clifford Chance