Mar. 31, 2017
The Kansai Electric Power Co., Inc.
Construction of Tanjung Jati B coal-fired power plant Units 5 & 6 Expansion Project (2,000MW) commences in Indonesia
Sumitomo Corporation (head office: Tokyo, Japan; President & CEO: Kuniharu Nakamura) together with The Kansai Electric Power Co., Inc. (head office: Osaka, Japan; President and Director: Shigeki Iwane, hereinafter “Kansai Electric”) has satisfied the required conditions precedent for the project financing of the Tanjung Jati B coal-fired power plant Units 5&6 Expansion Project in Indonesia (hereinafter the “Project”) and commenced construction work on the Project on March 31, 2017. The Project has been developed together with PT United Tractor Tbk (hereinafter “UT”), an affiliate company of the largest Indonesian conglomerate Astra Group.
This BOT (Build, Operate and Transfer) (*1) Project with a total project cost of approximately 500 billion yen will add two new units of a high efficiency ultra-supercritical coal-fired power plant (generation capacity of 2,000 MW) in an area adjacent to the existing Tanjung Jati B coal-fired power plant (Units 1-4, total generation capacity of 2,640MW) located in Central Jawa, Indonesia, and will supply electricity over a period of 25 years to Indonesian power utility company PT PLN (Persero), following the completion of plant construction. Main equipment such as turbine and boiler will be supplied by Japanese manufacturers, and the plant is scheduled to achieve commercial operation in 2021.
Sumitomo Corporation has an extensive track record for both power generation business and power plant EPC (*2) business in Indonesia, including the existing Tanjung Jati B coal-fired power plant Units 1-4 which continue stable operation as one of the core power plants in the country, covering 11% of Jawa-Bali grid system’s capacity. Sumitomo Corporation is also committed to geothermal power projects which utilize the rich geothermal resources in Indonesia, having completed the Ulubelu geothermal power plant Unit 3 in September 2016, the Lahendong geothermal power plant Unit 6 in January 2017 and also been involved in the development of the Muara Laboh geothermal power plant project from early stages.
Kansai Electric became the first Japanese power utility company to participate in an overseas IPP project in 1998, and since then it has been actively involved in power businesses overseas such as the development of new hydropower projects in Indonesia and Laos. While this Project would be first time for Kansai Electric to undertake an overseas thermal power plant project from the construction phase, it will make effective use of the extensive knowhow and experience that it has gained through the construction, operation and maintenance of 12 thermal power plants in Japan including the Maizuru coal-fired power plant which is operating at the world highest level plant efficiency, as well as 6 power plants in overseas.
Sumitomo Corporation and Kansai Electric will enhance their presence in the Indonesian power generation market through the success of this Project, and continue to contribute to economic progress globally by developing power infrastructure in countries with a growing demand for power.
(*1) BOT (Build Operate Transfer): Type of project arrangement whereby a project company builds a facility and manages and operates it for a certain period to recover its investment, after which it transfers ownership of the facility to the public sector / authority.
(*2) EPC: Engineering, Procurement and Construction