Publish Date : 12-Dec-2018
In October 2018, Sojitz Corporation (Sojitz) concluded a project finance-based financing agreement (totaling USD 1,312,000,000) for the Jawa 1 Gas-to-Power project in the Republic of Indonesia. The agreement was concluded through PT Jawa Satu Power, a special purpose company for IPP business established between Sojitz, Indonesias state-run energy company PT Pertamina (Persero) (Pertamina) and Marubeni Corporation (Marubeni), and PT Jawa Satu Regas, a special purpose company established between Sojitz, Pertamina, Marubeni, and Mitsui O.S.K. Lines to manage operations of the floating storage and regasification unit (FSRU) dedicated for the project. Construction of the combined cycle power plant and FSRU is scheduled to begin in December.
The agreement calls for co-financing by Japan Bank for International Cooperation; Asian Development Bank; MUFG Bank, Ltd.; Mizuho Bank, Ltd.; Crdit Agricole Corporate and Investment Bank, Tokyo Branch; Societe Generale Tokyo Office; and Oversea-Chinese Banking Corporation Limited. All funding provided by the commercial bank is covered by Nippon Export and Investment Insurance (NEXI).
This Gas-to-Power project covers the integrated development, construction, and operation of a 1,760MW gas-fired, combined cycle power plant and an FSRU to store and re-gasify liquid natural gas (LNG) in West Java, Indonesia. Once construction is completed in 2021, Jawa 1 will supply power to state-owned power company PT PLN (Persero) (PLN) for a 25 year period. Additionally, the project marks not only Indonesias first gas-to-power project, but the first project finance-based Gas-to-Power project in Asia.
Sojitz has developed a strong and long-standing relationship with Pertamina over nearly 40 years, starting with Sojitzs involvement in the Bontang LNG project and the Arun LNG project in the 1970s. Bontang was the first LNG production terminal in Indonesia, in which Sojitz assisted by performing feasibility studies, financing arrangement, and entering into a long-term LNG sales contract with Japanese customers.
Through its subsidiary LNG Japan Corporation, Sojitz also owns a stake in the Tangguh LNG project in West Papua, Indonesia. LNG produced at Tangguh is supplied to PLN and Japanese utility companies, helping to meet energy demand in Indonesia as well as provide a stable supply of energy to Japan.
With the involvement in this Gas-to-Power project, Sojitz will continue to contribute to Indonesias further industrial development and economic growth as well as the development and the enhancement of an energy and infrastructure value chain in the country, taking the companys experience not only in large-scale, gas-fired IPP projects in the Middle East, Asia, and the Americas, but in the LNG business in the country.
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