State-owned electric company PT Perusahaan Listrik Negara (PLN) has secured a ¤160 million (US$216 million) loan from Standard Chartered Bank to support the development of the company'€™s two gas-fired power plants.

The loan, which will mature in 12 years, is under an export credit agency plan involving Finnish firm Finnvera. PLN will use the fund particularly to support the purchase of engines needed for the development of the PLTG Arun plant in Aceh and the PLTG Bangkanai plant in Central Kalimantan. The machinery will be bought from Finnish company Wartsila.

'€œThis is the first time an Indonesian state-owned enterprise has gotten a loan without a guarantee from the government,'€ PLN president director Nur Pamudji told reporters on Wednesday.

PLTG Arun is designed to have a capacity of 184 megawatts (MW), while PLTG Bangkanai will have 155 MW. The Arun power plant will run on liquefied natural gas supplied from the Tangguh block in Papua.

Meanwhile, PLTG Bangkanai will be supplied from the Bangkanai block in Central Kalimantan operated by Salamander Energy.

Construction on the two plants will begin this month and is expected to finish in 15 months.

Indonesia is trying to boost its electricity supply to meet growing demand. The country needs to add an average of 5,000 MW until 2022 to avoid an electricity crisis.

The Energy and Mineral Resources Ministry'€™s directorate general for electricity reported that the national installed power capacity stood at 46,428 MW as of the end of 2013 with the electricity ratio at 80.4 percent.

The demand for energy has attracted foreign financing to support infrastructure development.

Apart from supporting PLN and its projects, Standard Chartered Bank Indonesia CEO Tom Aaker said the bank was looking at other infrastructure development opportunities.

'€œWe have the appetite to help with many kinds of infrastructure: power plants, airports, toll roads and ports, even if there is no guarantee from the government. We will do more infrastructure financing in 2014,'€™'€ he said.

Aaker added that his company had a lot of experience in Indonesia, with other clients including mining firm PT Aneka Tambang, flag carrier PT Garuda Indonesia and steel giant PT Krakatau Steel.

Finnvera executive vice president Topi Vesteri said his company'€™s loan commitments in Indonesia
had almost doubled in 2013 and it was expecting to see more new projects in the country that offered growing opportunities for Finnish exporters.

Pamudji said PLN was also working to conclude the engineering, procurement and construction (EPC) tender of two other power plants, which are a 2x55 MW hydro-powered power plant in Jatigede, West Java, and an up to 500 MW gas- and steam-fired plant in Grati, East Java.

He said the Jatigede plant would need around US$150 million and Grati would require $500 million. The projects are under tender, in which participants consist of EPC contractors and lenders.

The tender for the Jatigede plant is almost completed and will be announced at the end of next month, according to PLN director for planning and risk management Murtaqi Syamsudin. The Grati tender will likely close by the first quarter.

'€œThe Jatigede and Grati projects each have three participants. Grati plant is expected to start supplying electricity in 2015 while Jatigede in 2017. Jatigede takes longer as the development is under a dam,'€ Murtaqi said

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