Japanese-led consortium loans $1.31b to Indonesian gas-to-energy project

The project will yield a 1,760MW gas-fired plant and an LNG FSRU unit to fuel it.

A consortium comprised of Japanese and Indonesian financiers loaned a total of $1.31b to PT Jawa Satu Power (JSP) and PT Jawa Satu Regas (JSR) for the Jawa 1 Gas-to-Power Project in Indonesia.

According to an announcement, the Japan Bank for International Cooperation (JBIC) committed $600m to the total loan for JSP and JSR. It joined financiers Marubeni Corporation, Sojitz Corporation, Mitsui O.S.K. Lines, Ltd., and PT. Pertamina (Persero).

The loan is co-financed by Mizuho Bank, MUFG Bank, and others. The portion co-financed by private-sector banks is covered by Nippon Export and Investment Insurance (NEXI).

In this project, electric generation and gas-related facilities will be developed in an integrated manner in West Java, Indonesia. JSP will construct, own and operate a 1,760MW gas-fired combined cycle power plant, whilst JSR will construct, own and operate an offshore floating LNG storage and regasification unit (FSRU) to supply fuel to the power plant.

The electricity produced by these facilities will be sold to PT PLN (Persero) for a period of 25 years.

“Against the backdrop of Indonesia's surging electricity demand, which has increased due to steady economic growth, the Indonesian government is moving forward with a plan to build an additional 56GW of generation capacity over the next 10 years, including this project,” JBIC said.

“The government emphasizes gas-fired generation as a middle-load power source for sustainable electricity supply, with the intention of maintaining the proportion of gas power generation to the country's total power output at more than 20%. In view of this situation, this project is thus considered to be congruent with Indonesia's electricity policy,” the bank added.