Chapter 6

PT Paiton Energy (Paiton I), Indonesia

Type of project

1,230 MW coal-fired power plant.

Country

Indonesia.

Distinctive features

• One of the largest independent power projects in Asia.


• The first of 27 independent power projects that signed Power Purchase Agreements
  (PPAs) with the Indonesian state utility in the early 1990s.


• Indonesia’s first build-own-operate (BOO) electrical generating facility – a model
  for large private power programmes.


• Contract awarded without competitive bidding.


• Bank underwriting before syndication.


• Government support letter, but no government guarantee.


• Single commercial source of coal.
  •Tight government-imposed deadline for financial closing.


• Bondholders committed to 18-year risk prior to construction.


• Export–Import Bank of Japan (Jexim) assumes construction risk.


• First investment-grade credit rating for a greenfield international power project.

Description of financing

The 1995 financing comprised:

•a US$900 million facility from Jexim;

•a US$540 million facility from the Export-Import Bank of the United States (US

Exim);

•a US$200 million facility from the Overseas Private Investment Corporation (OPIC);

• US$180 million as a funding loan, refinanced in 1996 with Rule 144A private
  placement of US$180 million 9.34 per cent senior notes due 2014;


• US$374 million subordinated debt from the sponsors; and


• US$306 million in equity.