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Adaro, Chinese firm to build power plant
Coal miner Adaro Energy and China Shenhua Overseas and Development Co
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oal miner Adaro Energy and China Shenhua Overseas and Development Co., Ltd. Will team up to develop a 2x300 megawatt mine-mouth coal-fired power plant in Adaro's coal mine in East Kalimantan.
The Memorandum of Understanding (MoU), according to a written statement posted in the Indonesia Stock Exchange (IDX) website on Tuesday, was signed in Jakarta last Friday by representatives from China Shenhua and Adaro's subsidiaries Adaro Power (AP) and Bhakti Energi Persada (BEP).
'The Parties agreed to develop a joint project on coal and power plants in East Kalimantan. The Parties intend to establish a joint venture in Indonesia to develop mine mouth coal fired power plants, which will likely be owned 51 percent by Shenhua Overseas and 49 percent by AP,' the statement explained.
A significant amount of the total project investments will be funded with non-recourse project debt financing, the statement went on without providing details on how much the project will cost both parties.
'The long term power capacity is expected to be expanded in line with growth of power demand. The electricity shall be provided by integrated transmission to the East Kalimantan, South Kalimantan and Central Kalimantan grid,' it further added.
Shenhua Overseas, according to the statement, intends to initially acquire a minority equity interest in a BEP subsidiary for the development of a coal mine and for the purpose of supplying the fuel to the project, subject to a satisfactory outcome of their due diligence and evaluation.
The agreement is among 12 MoUs for cooperation in various economic sectors agreed following the Indonesia-China Business Forum organized by the Indonesia Chamber of Commerce and Industry (Kadin) in Beijing earlier this month, hosted simultaneously with the Asia-Pacific Economic Forum (APEC). (***)
