MAXpower Group, a private equity-backed Southeast Asian power plant developer, has signed a memorandum of understanding (MoU) with PT Lamong Energi Indonesia (LEGI) to supply 15 megawatts (MW) of gas-fired power capacity to Terminal Teluk Lamong Industrial Port in East Java.
The facility is one of Indonesia's fastest growing industrial ports and the first in Asia to employ fully automated container handling systems, with ship-to-core and automated stacking cranes, straddle carriers and combine tractor terminals.
The deal comes barely more than a month after the company signed another MOU with LEGI under which it will supply about 45MW to the neighbouring Tanjung Perak industrial port.
“Demand for electricity is strong and growing rapidly in the booming industrial port sector across Indonesia. We are delighted to partner with two Indonesian state-owned enterprises to support this industry’s expansion, an essential element of the country’s overall economic development,” said Arno Hendriks, MAXpower chief executive officer, in a statement.
The developer is 40 percent-owned by private equity firms which include pan-Asian infrastructure fund SCI, Standard Chartered Private Equity and Jakarta-based Mahanusa Capital. It also received a $12.5 million capital injection from a number of development finance institutions in July last year.
The group of investors, which backed the business through Indonesian Infrastructure Finance (IIF), a vehicle that invests alongside the Indonesian government, comprised the International Finance Corporation, the Asian Development Bank, Germany’s DEG, as well as Sumitomo Mitsui Banking Corporation.
LEGI is a joint venture between state-owned port developer PT Terminal Teluk Lamong and contractor PT Adhi Karya (Persero).
MAXpower’s project is deemed essential to sustain the rapid growth of Terminal Teluk Lamong Industrial Port. It is being developed under a long-term Build-Own-Operate-Transfer (“BOOT”) scheme in which Persero will purchase the electricity output and provide the natural gas to fuel the project. The project is expected to be in service by end 2015.
The port sector – along with alluvial transportation – has been targeted by the government as a priority to achieve inclusive economic growth. President Jokowi announced plans earlier this year to develop 24 ports nationwide and to cut logistics costs from 24 to 19 percent of the nation’s GDP.
The government has authorised state-owned companies to develop a total of 15 commercial ports in 2015, with the Indonesian Transportation Ministry focused on developing non-commercial ports in remote areas.