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ADB moves back funding timeline for first coal plant shutdown
The early retirement project for the Cirebon-1 has overshot its initial target to close the coal power plant by the year-end, but the ADB has brushed off the delay as part of the bumps expected in managing the pioneering project under the ETM.
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A bus passes between pipes on Oct. 18, 2020, as it heads toward the Cirebon-1 coal-fired power plant in Cirebon, West Java. (Antara/Yudhi Mahatma)
T
he Asian Development Bank (ADB) has missed its target to reach a deal this year on the early retirement of the Cirebon-1 coal-fired power plant in Cirebon, West Java, though the multilateral development bank still aims to reach an agreement with stakeholders on the funding terms at the “earliest possible time”.
ADB Indonesia country director Jiro Tominaga said the project’s pioneering nature was one of the challenges to closing the deal.
“There are complexities involved: different stakeholders, regulatory areas, and also [from] the commercial side,” he told reporters on Thursday in Jakarta.
The ADB had a target to achieve financial closure for the Cirebon-1 early retirement project by the end of 2024, according to a document the lender issued in February.
The deal aims to reduce the tenor of the plant’s power purchase agreement (PPA), which would effectively cut its operational life, and it is hoped this scheme will open doors to similar initiatives for additional coal power plants in Indonesia and other countries.
Tominaga said the ADB was assisting parties involved in working out the challenging aspects of the Cirebon-1 early retirement project to make sure that “everybody is satisfied with how it is being arranged”.
While confirming that the time frame had been postponed slightly from the initial schedule, he added: “But we are not too worried about that, because it is a complex [project] and it is something that will hopefully become a blueprint for the future [for] similar deals to come.”
