Indonesia’s 2GW coal-fired plant gets US$3.36bn financing

A consortium of Asian banks will provide US$3.36 billion in loans to support the expansion of the Tanjung Jati B coal-fired power plant project in Indonesia.

The final loan agreement was approved in February by the government-owned Japan Bank for International Cooperation (JBIC), with backing from the big three Japanese commercial banks —Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation — as well as other Japanese banks and Singapore’s OCBC.

The financing agreement does not include two French banks, Société Générale and Crédit Agricole, which originally planned to provide loans.

The 2,640 MW plant, located in the Jepara district of Central Java province, began operating in 2006. The plant operator is PT. Bhumi Jati Power (BJP). BJP was founded jointly by Sumitomo Corporation (50%), Kansai Electric Power Co. Inc. (25%) and PT. United Tractors Tbk (UT) (25%), a member company of Indonesia’s largest conglomerate Astra Group.

The project have been the target of protests from both local and international groups.

The planned expansion will add another 2,000 MW of capacity, drawing protests from activists who say the expansion further threatens the health and livelihoods of the surrounding communities.

Plans to expand Tanjung Jati B are part of a broader initiative that aims to add 35 GW to Indonesia’s electrical grid by 2019. The government is relying heavily on coal to meet this ambitious goal, with 117 new coal-fired power plants planned.