Sarulla Consortium Hires Banks for $410 Million Geothermal Loan
A consortium formed to build the Sarulla geothermal power project in Indonesia hired six banks to help arrange a $410 million loan, according to a person familiar with the matter.
Bank of Tokyo-Mitsubishi UFJ Ltd., ING Groep NV (INGA), Mizuho Corporate Bank Ltd., National Australia Bank Ltd. (NAB), Societe Generale (GLE) SA and Sumitomo Mitsui Banking Corp. will market the 20-year project finance facility to other lenders, the person said, asking not to be identified as details are private. The loan will pay a margin of around 200 basis points more than the London interbank offered rate, the person said.
The Sarulla power project will require total financing of $1.26 billion, the person said. A further $600 million will come from the Japan Bank for International Cooperation while another $250 million will be lent by the Asian Development Bank, the person said.
PT Medco Energi Internasional, Indonesia’s biggest publicly traded oil company, U.S. turbine manufacturer Ormat Industries (ORMT) Ltd. and Japan’s Itochu Corp. (8001) won a contract in 2006 to construct and operate the 340-megawatt geothermal power plant, which will be located in Sumatra, an island in the Southeast Asian nation’s north. Kyushu Electric Power Co. signed an agreement in 2007 to join the group.
Upon completion, the plant will be the largest single- contract geothermal power project, according to information about the project located on the ADB’s website.
PT Perusahaan Listrik Negara, Indonesia’s state-owned electricity company, signed an agreement with Medco Energi to buy electricity from the plant under a 30-year contract, Listrik Negara President Director Dahlan Iskan said in April last year.
To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net
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