IIF-backed MAXpower in new Indonesian gas deal

Indonesia-based gas-fired power producer MAXpower Group has won two power plant projects in the Indonesian islands of New Tarahan and East Kalimantan.

MAXpower Group, the Southeast Asian gas-to-power specialist, through its independent power producer business, PT MAXpower Indonesia, has won two competitive tenders to supply 40 megawatts (MW) of total capacity to PT PLN (Persero), the Indonesian government-owned electricity utility, under 80 percent take-or-pay agreements.

The contract follows an investment of $12.5 million in July last year from Indonesia Infrastructure Finance – a vehicle owned by the Indonesian government and a group of development finance institutions comprising the International Finance Corporation, the Asian Development Bank, Germany’s DEG, as well as Sumitomo Mitsui Banking Corporation – intended to support MAXpower’s growth in Indonesia.

The development of the 30MW gas-fired power plant equipped with 11 high-efficiency 620 GE Jenbacher engines, in New Tarahan in the Lampung region, Sumatra, is expected to be completed in just 90 days, a record for a project of this size.

The second project, located at Tarakan, East Kalimantan, will utilise three 620 GE Jenbacher engines to generate a capacity of 9MW, and is expected to be completed in 70 days. It will bring urgently needed power to the remote area that has historically relied on diesel and oil to fuel power generation.

The government has recently implemented new targets to increase gas-fired power production by 11,000MW in the next four years to meet the fast growing local demand for electricity, but also as an affordable and low emission solution to replace Indonesia’s old fleet of diesel-powered generators.

“This is creating outstanding opportunities for MAXpower’s fast, affordable and scalable technology, and we are seeing significant growth in our development pipeline, which currently stands at 177MW of projects under construction or contract,” said Hendriks.

Both projects are expected to be completed in mid-2015, and will increase the total capacity of MAXpower’s fleet by more than 10 percent.

PT MAXpower Indonesia is a subsidiary of MAXpower Group, a holding in which Standard Chartered holds 22.7 percent stake through its $650 million pan-Asian infrastructure fund– Standard Chartered IL&FS Asia Infrastructure Growth Fund (SCI Asia), and an additional 7.6 percent stake through its Private Equity Fund (SCPE). The two other shareholders are Jakarta-based PT Manahusa Capital and Sequislife, an investment group and a life insurance company holding 4.3 and 2.4 percent respectively.