ITOCHU Announces Conclusion of Loan Contract for Sarulla Geothermal IPP Project in Indonesia
March 31, 2014
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced that it concluded a loan contract concerning one of the largest geothermal power generation projects in the world, which will be constructed and operated in North Sumatra, Indonesia. The contract was concluded together with Kyushu Electric Power Company Incorporated, PT Medco Power Indonesia, and Ormat Technologies, Inc. in the United States, through the investment subsidiaries owned by each of the companies and the jointly established operating company, Sarulla Operations Ltd.
The loan consists of project financing* supported by the Japan Bank for International Cooperation, the Asian Development Bank, Mizuho Bank, Ltd., the Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Societe Generale Bank, ING Bank N.V., and National Australia Bank.
This project involves the construction of a geothermal plant with a total capacity of 320.8 MW in Indonesia, where demand for power is expected to increase in the future. The power generated will be sold to Indonesia’s state-owned electricity company for 30 years.
ITOCHU will contribute to the Indonesian government’s policy of promoting geothermal energy through this project and continue to be active in the power generation business promoting renewable energy resources such as geothermal energy and wind power.
- Project financing is a financing method that uses the future cash flows of the project as the main repayment source.
Outline of Sarulla Geothermal IPP Project
| Item | Contents |
|---|---|
| Location |
Sarulla region, North Sumatra province, Indonesia (Approx. 350km to the south of Medan, the fourth largest city in Indonesia) |
| Description |
Comprehensive development from geothermal resource development to power generation The power generated will be sold to Indonesia’s state-owned electricity company for 30 years |
| Capacity | 320.8 MW (3 units) |
| Investors |
Kyushu Electric Power 25% ITOCHU Corporation 25% PT Medco Power Indonesia*1 37.25% Ormat Technologies, Inc.*2 12.75% |
| Schedule |
April 2014: Construction to commence 2016: Commercial operation of the first generator to commence 2017: Commercial operation of the second generator to commence 2018: Commercial operation of the last generator to commence |
- *1: An energy company owned mainly by Indonesia’s largest private energy company PT. Medco Energi International Tbk, whose businesses include oil & gas source development, petrochemical business, LP gas production, fuel supply, power generation, and O&M servicing of power plants.
- *2: A U.S. company that works comprehensively on projects in the geothermal generation field by engaging in development, production of main equipment, construction, investment, and operation.