Republic of Indonesia / Loan Insurance for Rantau Dedap Geothermal IPP Project

March 28, 2018

Nippon Export and Investment Insurance

Nippon Export and Investment Insurance (NEXI; President and CEO: Kazuhiko Bando) has decided to provide insurance to support commercial bank loans to a geothermal power plant project in which a special purpose company PT. Supreme Energy Rantau Dedap (“SERD”) owned by Marubeni Corporation, Tohoku Electric Power Co., Inc. ENGIE S.A. and PT. Supreme Energy. SERD will construct, operate, and maintain a geothermal power plant in Indonesia. Following the Muara Laboh Geothermal IPP Project,1 this is going to be the second time that NEXI has provided insurance to cover a risk of geothermal resources capacity associated with a geothermal power project financing.

Under the project, SERD will build a geothermal power plant (gross capacity : 98.4MW) in the State of South Sumatra to start operation in 2020, with a 30-year power purchase agreement with Indonesian national electricity power company PT PLN (Persero). West Japan Engineering Consultants, Inc., a subsidiary of Kyushu Electric Power Co., will support the project company as a technical service advisor over the course of a loan period. The support will include geothermal well drilling strategy development, well management and supplementary well drilling plan.

The project will be co-financed by Japan Bank for International Cooperation (JBIC), the Asian Development Bank (ADB), Mizuho Bank, Ltd. (lead arranger), Sumitomo Mitsui Banking Corporation, and the Bank of Tokyo-Mitsubishi UFJ, Ltd. NEXI’s insurance will support the commercial banks’ USD 126 million loans.

In November 2015, the Japanese government announced “Actions for Cool Earth: ACE2.0” to support developing countries that address climate change. Also in the “Strategy for Exporting Infrastructure Systems” updated in May 2017, the government expresses its willingness to promote Japanese infrastructure business in the global market including design, construction, operation and management as well as investment in projects in their host countries. For NEXI, supporting this project through loan insurance is in conformity to the Japanese government’s policy.

To meet its surging electricity demand driven by economic growth, Indonesia is planning to develop new power source for 35 GW capacity. Indonesia has the world’s second largest geothermal resource next to the U.S. waiting to be developed. NEXI’s financial support will help promote Japanese companies’ business opportunity in geothermal development in Indonesia and also will help strengthen and maintain their international competitiveness in the energy development including renewable energy.

As a financial institution implementing Japan’s policy, NEXI will continue to support Japanese companies’ overseas business.

Borrower PT. Supreme Energy Rantau Dedap
Lender (Insured) Mizuho Bank, Ltd. (lead arranger)
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Insurable Value USD 126 million
Tenor 20.5 years
Covered Risks Political Risk 100%, Commercial Risk 90%

Contact: Structured and Trade Finance Insurance Department Tel: 03-3512-7202

1 For details of the first project, please see Topics (News Release), January 30, 2017.