Indonesia's state-owned power firm PLN has asked a consortium of Chinese banks, which have committed to financing a number of the company's coal-fired power projects, to provide low-interest loans, local press reported Thursday.
PLN has recently received the approval of the State Ministry for State Enterprises to pledge its assets to secure loans for the construction of the new power plants, reported English daily The Jakarta Post.
PLN had asked for the ministry's permission to use its assets to secure the loans after the Finance Ministry refused to go guarantor.
PLN has signed agreements with a number of overseas creditors to finance 85 percent of the cost of power projects worth 79 trillion rupiah (8.7 billion U.S. dollars), but the progress of the projects has been halted for lack of a government guarantee.
These projects are part of PLN's fast-track program to provide additional power supply of about 10,000 megawatts by the end of 2009 to cope with the country's acute power deficit.
As part of the fast-track program, PLN signed contracts in March for the construction of five coal-fired power plants, all in Java, with a total capacity of 3,300 MW. These five power plants are all to be built by Chinese companies.
Source: Xinhua
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