ITOCHU Announces EPC Agreement for Coal Fired Power Plant in Indonesia

July 31, 2017

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it has concluded an EPC (Engineering, Procurement and Construction) agreement for the construction of Kalselteng-2 Coal Fired Plant (South Kalimantan Province, Kalimantan Island, Republic of Indonesia; total capacity: 200 MW, hereinafter “Project”) with Indonesia’s state-owned electric power company (hereinafter “PLN”) under the consortium that ITOCHU formed with major engineering companies in Korea and Indonesia, namely, Hyundai Engineering Co., Ltd. and PT. Truba Jaya Engineering.
The contract amounts to approximately US$400 million. The construction of the Project has commenced and is expected to be completed in 2020.

This is an expansion project of the existing coal fired power plants (Units 1 to 4, 65 MW x 4 plants) located in South Kalimantan Province, Kalimantan Island, with the construction of Units 5 and 6.
It will contribute to reducing the environmental load by utilizing the high efficiency equipment for the Project which is comprised of the boilers manufactured by IHI Corporation and the steam turbine generators manufactured by Fuji Electric Co., Ltd.
To support Japanese companies’ export, Japan Bank for International Cooperation and MUFG’s banking arm, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (hereinafter, “BTMU”) will provide loans (approx. 16.9 billion yen and approx. US$89 million) to PLN as funds for the Project.
The loan provided by BTMU will be covered by insurance from Nippon Export and Investment Insurance.

In Indonesia, the demand for electricity is increasing constantlywith the economic growing. In order to meet such forecast, Indonesia has been promoting the 35 Gigawatt Power Plants Development Plan. This Project is positioned as part of this program.

ITOCHU has been actively promoting its power generation business in Indonesia and contributes to the stable supply of electricity as well by IPP investments such as the Sarulla Geothermal 320MW IPP Project.
EPC business for the construction of power plants is one of important segments in ITOCHU and ITOCHU will continue to contribute to the economic growth of countries worldwide including Indonesia through its business activities in the power sector.

  • ** As of November 2016, the total capacity of power generation facilities was approximately 52 GW. (Source: RUPTL 2017 - 2026, material by PLN)

Location of Kalselteng-2 Coal Fired Power Plant under construction

Outline of the Kalselteng-2 Coal Fired Power Plant Project

Client PT. PLN (Persero), Indonesia’s state-owned electric power company.
Construction site South Kalimantan Province, Republic of Indonesia
Power generation method Coal fired power plant
Power capacity 200 MW (100 MW x 2 plants)
Construction schedule (plan) July 2017: Commencement of construction
July 2020: Unit 5 Commercial operation
October 2020: Unit 6 Commercial operation