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Indonesia – Hadiputranto, Hadinoto & Partners Advises On Landmark Geothermal Project.

15 November, 2012

 

 

Hadiputranto, Hadinoto & Partners (HHP), the member firm for Baker
& McKenzie in Indonesia, has advised Marubeni Corporation ("Marubeni), on a significant geothermal project in Indonesia.
 
PT Supreme Energy Rantau Dedap (Indonesia, “SERD”), a special purpose company established by Marubeni Corporation (“Marubeni”), PT. Supreme Energy (Indonesia, “Supreme Energy”) and GDF Suez S. A. (France, “GDF Suez”), entered into a Power Purchase Agreement (“PPA”) for 30 years with the Indonesian
state-owned electricity utility, PT. PLN (Persero) (Indonesia, “PLN”) in respect of the development of Rantau Dedap geothermal power plant project (“Project”) located in the South Sumatra Province of Indonesia.
 
SERD will develop the geothermal resources in the Rantau Dedap area and construct a geothermal power plant with a generating capacity of 220MW. The target commercial operation is scheduled in 2016 and the electricity generated by the Project will be supplied to PLN based on the PPA. SERD expects to procure main
equipment of its power plant from Japanese manufacturers and secure financing through project finance with the assistance of international commercial banks and export credit agencies such as Japan Bank for International Cooperation.
With the world’s largest estimated geothermal resources and rapidly growing electricity demand, the Indonesian government is proactively laying groundwork to expand development of geothermal power plants.
 
The Project is part of the Indonesian government’s electricity development program (the Fast Track Program II) and holds an important place for the future development of geothermal energy in Indonesia. Marubeni will, through the Project, contribute to stable power supply and facilitation of geothermal resources as a low emission and renewable energy in Indonesia.
 
The HHP team was led by Foreign Legal Consultant Luke Devine. The team had lead responsibility for the negotiation of the long term Power Purchase Agreement with PLN, and the Business Viability Guarantee Letter with the Ministry of Finance.
Luke Devine commented "this is the third privately financed geothermal  Independent Power Project to be signed up by in the last 12 months, signalling real momentum on the part of the Indonesian Government to see through its aggressive geothermal IPP program under its 10,000MW Second Fast Track Program.
 
These projects are also strengthened by the Ministry of Finance providing support for PLN's obligations under the long term Power Purchase Agreement throughout the loan period, which ensures that lenders have the financial assurance necessary to facilitate them lending the substantial sums required for the development of these projects. The relative quick speed at which PLN and the Government are finalising these projects are sending a very positive signal to the investment and financial community, and presenting Indonesia as a very
attractive home for capital for those wanting to invest in the renewable energy sector".
 
For further information, please contact:
 
Jamie Kar, Baker & McKenzie
jamie.kar@bakermckenzie.com

 

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