US$1.3 billion financing secured for 1.76 GW gas-to-power project in Indonesia

This article is part of a daily series of IPP articles. If you want to know more about the latest power generation projects globally visit our IPP Today section. You can receive them by email on a daily basis.

Indonesian companies PT Jawa Satu Power (JSP) and PT Jawa Satu Regas (JSR) have secured US$1.312 billion financing for the Jawa 1 Gas-to-Power Project.

The project involves the development of a 1,760 MW gas-fired combined cycle power plant, installed with gas turbines manufactured by General Electric Company, and an offshore floating LNG storage and regasification unit (FSRU) to supply fuel to the power plant. It is located in West Java province, Indonesia.

JSP will construct, own and operate the power plant while JSR will construct, own and operate the FSRU. The electricity produced by these facilities will be sold to PT PLN (Persero), a state-owned power utility in Indonesia, for a period of 25 years. 

Both JSP and JSR are Indonesian companies: the former invested in by Marubeni Corporation, Sojitz Corporation and PT. Pertamina (Persero), the state energy company of Indonesia; the latter by Marubeni Corporation, Sojitz Corporation, Mitsui O.S.K. Lines, Ltd., and PT. Pertamina (Persero), among others.

Of the total financing, US$604 million is being provided by the Japan Bank for International Cooperation (JBIC). The remainder is co-financed by Mizuho Bank, MUFG Bank and other banks, and is covered by Nippon Export and Investment Insurance (NEXI).

This is the first project financing provided for gas-to-power projects to be implemented in Asia as well as the first time for JBIC to finance such a project.

JBIC's loan is provided as part of the bank's newly launched Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth (QI-ESG). Jawa 1 will be the flagship project of the facility as well as the first project in Asia under QI-ESG for the purpose of preserving the global environment.  

The project forms part of the Indonesian government's plan to build an additional 56 GW of generation capacity over the next ten years. This is necessary to meet the country's surging electricity demand, which has increased due to steady economic growth. The government intends to maintain the proportion of gas power generation to the country's total power output at more than 20%.