Shearman & Sterling advised the lenders and Korea Trade Insurance Corporation (K-Sure) in connection with the financing of the US$545 million 200 MW Kalsel coal-fired Independent Power Producer project in Indonesia. The project will be built in South Kalimantan, on the Indonesian side of the island of Borneo.
The project is being financing with senior debt and equity bridge loans. The 20-year senior debt of $422 million will be divided into a US$401 million facility insured by K-Sure and an uncovered US$21 million facility from Korea Development Bank. The lenders for the K-Sure covered facility comprise a combination of development and commercial banks, including Korea Development Bank, BTMU, DBS, Mizuho, SMBC and HSBC.
Adaro Energy, through its subsidiary Adaro Power, owns a 65% stake in the project company, Tanjung Power Indonesia, while Korea East-West Power owns the remaining 35% through its subsidiary, EWP Indonesia. The plant will be built under a Build, Own, Operate and Transfer concession for 25 years and benefits from a business viability guarantee letter from the Indonesian government.