SINGAPORE (Yosefardi) – PT Indika Energy Tbk (INDY), through its whollyowned finance subsidiaries, Indo Energy Finance B.V. and Indo Energy Finance II B.V., had on 23 October 2015, with PT. Cirebon Energi Prasarana (CEPR), a special purpose company, entered into a long-term Power Purchase Agreement (PPA) with state-owned electricity company PT PLN (Persero).

The agreement is related to the coal fired power plant project with the capacity of 1×1000 MW, located at Cirebon, West Java, Indonesia, which also known as Jawa-1 or Cirebon Expansion Project (CEP-2 Project) with the Build, Own, Operate and Transfer Scheme.

CEPR is sponsored by Indika Energy, Marubeni Corporation, Samtan Co., Ltd., Korea Midland Power Co., Ltd. (Komipo), and Chubu Electric Power Co., Inc.

CEP-2 Project is an expansion project of the existing coal fired power plant CEP-1 project with the capacity 1×660 MW, which is also located at Cirebon, West Java, Indonesia (CEP-1 Project). The construction and development of CEP-2 Project will be performed by CEPR.

The Government of Indonesia is targeting to provide a 35,000 MW (35 GW) power capacity in the next 5 years as part of policies for infrastructure improvement, there is a high expectation for independent power plant (IPP) developers to supply power to meet an increasing demand under the growing economy. The CEP-2 Project is part of the Indonesian Government’s electricity project and considered as a large-scale IPP project.

Indika Energy, through its subsidiary PT Prasarana Energi Cirebon (PEC), currently is having 25% participation ownership in CEPR. Indika Energy will also act as sponsor in the CEP-2 Project. Other sponsors to the CEP-2 Project is Marubeni, Samtan, Komipo and Chubu. Based on the PPA, CEP will construct and develop CEP-2 Project. Thereafter, the electricity generated by the Project on commercial operation period will be supplied to PLN based on the Commercial operation is scheduled in 2020.

The PPA shall also stipulates the electricity selling mechanism for 25 years as of the commercial operation.  CEPR expects to procure the main equipment of its power plant from Japanese manufacturers and secure financing through project finance by international commercial banks and export credit agencies such as Japan Bank for International Cooperation, Nippon Export and Investment Insurance and ExportImport Bank of Korea.