Geothermal power producer PT Geo Dipa Energi has secured a US$103 million loan from state-owned PT Bank Negara Indonesia (BNI) to develop a 55-megawatt (MW) geothermal power plant in Mount Patuha, West Java.
The loan will mature in 11 years, and has a 36-month grace period, Geo Dipa president director Praktimia Semiawan said Tuesday after a ceremony to sign the loan.
"We'll use the money to finance the power plant construction," he said.
"We expect the power plant to be in operation by early 2012."
The area around Mt. Patuha holds an estimated geothermal potential production capacity of 400 megawatts electrical (MWe).
Steam reserves at the wellhead, which are ready for production, are estimated at 60 MWe.
PT Geo Dipa Energi has formulated a Patuha potential development plan that constitutes three project sites: Patuha Units 1, 2 and 3.
The second and the third units are expected to begin production by 2013.
The loan signed Tuesday was for the financing of the first unit of the project. Praktimia said that unit would supply enough electricity to power 60,000 households.
BNI director Krishna Suparto said the bank would cover the entire loan, but once the project activity was stable, the lender might invite other banks to participate in the financing.
"BNI will still lead of the consortium," Krishna said.
He declined to say how much interest the loan carried.
Geo Dipa will sell the electricity produced from the power plant to state utility firm PT PLN, the sole electricity distributor in the country.
"We're still negotiating the price with PLN," Praktimia said.
"We expect the price will not be lower than 6 US cents per kilowatt hour."
Geo Dipa Energi is a joint venture by PLN and state oil and gas company PT Pertamina.
The company operates the first unit of the 60-MWe Dieng geothermal power plant. The electricity from that plant supplies PLN's Java-Madura-Bali grid.
State Minister for State Enterprises Sofyan Djalil said the government would establish Geo Dipa as a separate state enterprise focusing on geothermal development.
"We're now just waiting for the administrative procedures," he said.
"I expect to complete this before I leave office."