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tate-run coal producer Bukit Asam and conglomerate Sinar Mas Group have secured billion dollars worth of loans from Chinese lenders to finance their mega power plant projects, the companies say.

The agreements for the facilities, according to the statements, were signed at Beijing'€™s Great Hall on Friday during President Joko '€œJokowi'€ Widodo and his business entourage'€™s visit to the East Asian country.

Bukit Asam, through subsidiary Huadian Bukit Asam Power (HBAP), obtained US$1.2 billion from the Export-Import Bank of China (CEXIM) to finance construction of its 2x600 megawatt (MW) mine-mouth power plant in its concession in Tanjung Enim, South Sumatra.

The loan agreement was signed by Bukit Asam president director Milawarma, China Huadian Corporation vice president Ren Shuhui and a representative of CEXIM, the coal miner said in a statement.

The statement said that the loan channeled by CEXIM would account for about 75 percent of total investment needed for the project, which is worth $1.59 billion, while the remaining 25 percent or around $400 million would come from HBAP'€™s equity.

HBAP is 45 percent owned by Bukit Asam, while China Huadian Hongkong Co. Ltd. holds the remainder of the stakes. Thus, according to the statement, Bukit Asam would finance $180 million of the $400 million needed, while Huadian would pay the remainder.

The loan from CEXIM bank will be due in 10 years, excluding the 45 months needed for the construction of the power plant.

The power plant, the statement said, was part of Bukit Asam'€™s business diversification amid plunging coal prices. Construction of the power plant will start in early 2016 to commence operations
in mid-2019.

'€œThis project is part of Bukit Asam'€™s transformation from a coal miner to an energy company,'€
it stated.

The company '€” which will supply 150 million tons of coal from its Tanjung Enim concession for the power plant '€” has signed a 25-year power purchasing agreement with state-run electricity firm PLN.

Meanwhile, Sinar Mas has secured $1.5 billion from China Development Bank (CDB) and ICBC Financial Leasing Co. Ltd., a sum of which will be used to finance its power plant project.

Sinar Mas said in a statement that $510 million from the loan would be allocated for its Jakarta-listed energy subsidiary, Dian Swastatika Sentosa (DSS), and would make up about 75 percent of DSS'€™ $680 million power plant projects.

The projects are 1x300 MW Sumsel-5 Musi Banyuasin power plant in South Sumatra, worth $480 million, and 2x50 Kendari-3 in Southeast Sulawesi, worth $200 million.

'€œ['€¦] The loan agreement is a form of support from us for the government'€™s effort in boosting 35,000 MW power supply nationwide, especially to meet industrial needs,'€ Sinar Mas vice chairman Franky O. Widjaja said in the statement. Sinar Mas said about $700 million of the newly acquired loans would be used to develop the group'€™s pulp and paper business while the remaining $300 million would be used to develop Long Term Evolution (LTE) technology network under its cellular operator, Smartfren Telecom.