TPI, a joint venture between Adaro Energy’s Adaro Power and East-West Power Indonesia, a subsidiary directly owned by South Korean energy company Korea East-West Power, previously signed a power purchase agreement to sell electricity from the Tabalong facility, designed to produce up to 2x100 megawatts (MW) of electricity, to state-owned electricity company PLN for a period of 25 years.

The Tabalong power plant, slated to begin commercial operations in the first half of 2019, will need a total investment of US$545 million, with 75 percent of the figure to be funded by bank loans and the rest covered by TPI.

On Monday, TPI signed a loan agreement worth $422 million with six commercial banks, namely the Korea Development Bank, the Bank of Tokyo-Mitsubishi UFJ, DBS Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation and the Hong Kong Shanghai Banking Corporation. Korea Trade Insurance Corporation (K-SURE) will guarantee around $400 million of the total loans.

Meanwhile, Adaro Energy will also provide $88 million in contingency funds in the event that the investment value required for the Tabalong power plant surpasses the initial projection.

“This project shows our commitment to developing electricity facilities that are in line with future demand and also increase cooperation with our own coal business,” Adaro Energy president director Garibaldi “Boy” Thohir said on Tuesday.

Once in operation, the Tabalong power plant will be supplied with coal from another Adaro Energy subsidiary, Adaro Indonesia.

“Besides, we can actively support the government’s efforts to procure electricity and boost the welfare of people across the country,” Boy said.

In 2015, Adaro Energy, the nation’s largest coal miner by market value, produced 51.4 million tons of coal, 11 million of which was sold domestically, while another 40.4 million was exported overseas.

The company exported 16 percent of its coal production to China throughout 2015, and 13 percent to both India and Japan. As of October last year, the company had produced 39.3 million tons of coal, 75 percent of its total production target for 2016.

In order to maintain its performance, Adaro Energy has decided to focus on the domestic market, a plan that includes building new power plants and supplying coal for the government’s 35,000 MW electricity procurement project until 2019.

In June 2016, Bhimasena Power Indonesia (BPI), a joint venture between Adaro Energy, Japan’s Itochu Corporation and the Electric Power Development Co., Ltd (J-Power), reached financial closure for the development of the Batang power plant.

The Batang facility, slated for commercial operations in 2020, has secured total financing of about $3.42 billion from a consortium of nine Japanese banks, of which $2 billion came from the Japan Bank for International Cooperation (JBIC).

“So, we are proud to say that we have been able to achieve financial closure for two projects within only around seven months, with some help from our Japanese and South Korean counterparts,” Adaro Power deputy CEO Dharma Djojonegoro said.

In total, Adaro Energy plans to generate 5,000 MW of electricity by 2020.

Adaro Energy booked a 15.8 percent annual decrease in revenues to $1.77 billion within the first nine months of 2016. However, several efficiency measures have led the company to record a 21.67 percent drop in cost of revenue to $1.31 billion. Hence, its net profit soared 16.16 percent to $209.1 million.

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