SINGAPORE (Yosefardi) – SGX Main Board listed ISDN Holdings Limited, an integrated engineering solutions provider for diverse industries, has through its wholly owned subsidiary, Aenergy Holdings Company Ltd, today entered into a Memorandum of Understanding with Indonesia-based PT Izmi Power Mandiri (PT Tomuan) to develop an 8.0 megawatt (MW) mini-hydropower plant in Aek Sisira Desa Tomuan Holbung, Kecamatan Bandar Pasir Mandoge, Asahan regency, North Sumatra Province.
PT Tomuan had on 15 June 2012 entered into a power purchase agreement (PPA) with PT PLN (Persero) – Indonesia’s state-owned power distribution company to build, own and operate the proposed mini-hydropower plant.
PT Tomuan is fully owned by Pak Isa Indrawan (“the Vendor”) who is concurrently the Chief Executive Officer of the Izmi Group and PT SBM Sabang Energi. Pak Isa is also the Chancellor of the Universitas Pembangunan Panca Budi in Medan, Sumatra.
Under the terms and conditions of the MOU, ISDN will acquire 89% shareholding interest in PT Tomuan by way of cash payment of IDR (rupiah) 18 billion (equivalent to USD 1.5 million) to the vendor – through a series of agreed milestones – that will be subsequently capitalized as paid-up capital of PT Tomuan.
ISDN will also provide the necessary funding, support and management of the proposed hydropower plant as stipulated in the power purchase agreement.
ISDN’s latest mini-hydropower project is expected to cost USD $12 million to develop. The project will be financed by a combination of capital injection, bank borrowings and other forms of suitable investment instruments.
Under the power purchase agreement with PT PLN, PLN will purchase the power produced by PT Tomuan at a tariff rate of IDR 787 or USD $0.065 per KWh. The hydropower facility is expected to generate approximately 52 GWh of electricity annually, posting estimated revenue of USD $3.4 million. The running costs are expected to hover between 0.7 and 0.5 US cents per KWh.