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Add to Preferred SourcesThe Asian Development Bank (ADB) signed a private sector financing package to support the construction of a 275-megawatt combined-cycle gas turbine power plant in Riau province in central Sumatra, Indonesia, to help secure the country’s energy future and provide communities with more affordable and reliable electricity.
The financing consists of a $70 million loan from ADB’s ordinary capital resources and $82 million loan from Sumitomo Mitsui Banking Corporation and MUFG Bank, with ADB providing a partial risk guarantee (PRG) to the participating commercial banks. The International Finance Corporation (IFC) will provide $50 million for the Riau Natural Gas Power Project in the first-ever cofinancing of an infrastructure project by ADB and IFC in Indonesia.
“ADB’s involvement in the project has helped secure long-term commercial bank financing necessary for any large-scale infrastructure investment, which has remained a challenge in Indonesia,” said Infrastructure Finance Division Director for Southeast Asia, East Asia, and the Pacific at ADB’s Private Sector Operations Department Mr. Jackie B. Surtani.
The plant is expected to provide stable and reliable power to the domestic grid, amounting to about 1,445 gigawatt-hour annually. The use of combined-cycle gas-fired power generation will improve the environmental sustainability of the current energy mix in Sumatra by displacing diesel and coal as fuels for electricity generation.
Original source: ADB
Published on 22 March 2019