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Indonesia $1.8bn gas-fired plant secures PPA

Backed by two Japanese trading companies, the 1.76GW project will seek financing after contracting its output to domestic utility PLN.   

Jawa Satu Power, the project company of the Jawa 1 gas-fired plant, has entered into a 25-year power purchase agreement with Indonesian state-owned electricity utility PLN. 

The $1.8 billion project, which has a generating capacity of 1.76GW, is backed by a consortium of Japanese and domestic investors. Japanese trading house Marubeni Corporation and local state-owned oil and gas company Pertamina own an equal 40 percent share in the scheme while Sojitz Corporation, also a Japanese trading group, holds the remaining 20 percent stake. 

In addition to power generation, the project, which will become operational by 2021, also involves LNG storage and regasification for electricity production.   

Given the country’s increasing demand for electricity, Marubeni said there is a “high expectation” that overseas IPP developers will come in to help the government achieve its target of having an additional 35GW of power supply by 2019. The company said the three partners might invest more in the Indonesian power market.

Last December, another Indonesian super-sized power plant, the 2.1GW Jawa 7 coal-fired project, reached financial close thanks to a $1.3 billion loan by China Development Bank. The $1.8 billion plant is developed by a joint venture between China Shenhua Energy and a PLN subsidiary. 

For its part, Marubeni said it is now invested in power generation assets totalling over 10GW in 22 countries. Last week, the company was awarded the 1.2GW combined-cycle thermal power project in South Bangkok, marking the fifth scheme under its 10-year partnership with Germany's Siemens. 

The project boosted Marubeni’s awarded capacity in Thailand to 11GW, representing around 30 percent of the country’s total installed power capacity. 

A Nikkei report on Sunday said Marubeni will build and manage a 1.18GW solar farm in the United Arab Emirates said to be one of the world’s largest solar power plants. The project is estimated to cost 100 billion yen ($883 million; €821 million), part of which will be funded by a loan from the Abu Dhabi Water & Electricity Authority, according to the press report. 

Marubeni and ADWEA had not responded to requests for comment by press time.