Java 3 gas-fired plant to close late 2020
Marubeni Corporation is expected to reach financial close on a ECA/DFI-backed loan in Q4 2020 to finance the 800MW Java 3 gas-fired independent power project (IPP) in Indonesia. Financial close was expected sooner, however since the commercial operation date was pushed back to 2023, sources close to the deal say the financing will now close towards the end of next year.
The $800 million project, the first IPP tender under Indonesia's new Ministry of Energy & Mineral Resources (MEMR) regulations, was expected to reach financial close in the first half of this year but apparently there were issues relating to the terms and conditions of the 15-year PPA, as well as delays resulting from the presidential elections at the time of discussions.
Marubeni Corporation has been selected to be a 49% partner to PLN subsidiary Pembangkitan Jawa-Bali (PJB), which will hold a 51% stake in the joint venture that will develop the plant. Under the new shareholding structure, the Japanese developer is expected to provide a portion of the equity financing for PJB. Sponsors were originally set to sign a PPA with state-owned PLN at the end of 2018 and the offtaker will also supply the gas feedstock domestically.
Financed on a debt-to-equity ratio of 70/30, the 15-year facility comprises a commercial bank tranche covered by SERV, a direct loan provided by EDC, and an uncovered commercial bank tranche. MUFG is financial adviser. JBIC and the ADB are also expected to be approached for financing. The margin on the deal is around 190bp over Libor.
