Blackgold, China Huadian to develop 600MW coal-fired power plant in Indonesia

Blackgold, China Huadian to develop 600MW coal-fired power plant in
Indonesia

Coal miner Blackgold Natural Resources has entered into a conditional term
sheet agreement with China Huadian Engineering to develop a 2x300MW
coal-fired power plant in Indonesia.

The power plant project dubbed as Riau 1 will be built in Riau province.

Through its subsidiary, PT Samantaka Batubara (PT SB), Blackgold will take
part in joint development, construction, operation and maintenance of the
Indonesian power plant with China Huadian.

According to Blackgold, the signing of the conditional term sheet comes
after the 28 December 2015 agreement with China Huadian relating to its
entry into a consortium that will take part in a bidding process to provide
electric power to Indonesian-state owned utility, PT PLN (Persero).

Blackgold and China Huadian are set to form a joint venture (JV) company to
carry out their operations at the proposed Riau 1 coal-fired power plant.
They will be joined by a third partner which will have 5% in the JV while
BlackGold and China Huadian will have stakes of 44% and 51% respectively.

Blackgold Natural Resources CEO Philip Cecil Rickard said: "The signing of
this Term Sheet marks the next step forward for both parties as it irons out
the salient terms of the proposed joint venture between the parties.

"Leveraging on the capabilities of China Huadian in power engineering and
BlackGold's expertise in coal mining, we look towards securing the award of
the Bid for development of the Riau-1 Project."

The joint venture will be established depending on the successful award of
the bid by PLN to the PT SB, China Huadian consortium among other
conditions.

If successful, PT SB will handle negotiations of the power purchase
agreement with PLN. It will also become an exclusive supplier of coal to the
Riau 1 power plant for a long term of 30 years.

China Huadian, on the other hand will handle the engineering, procurement
and construction (EPC) and operations and maintenance tasks of the
coal-fired power plant. It will also take care of securing the debt
financing needed for the power plant project which is scheduled to begin
commercial operations in 2020.

Last week, Blackgold revealed that it expects Riau-1 Project to be among the
six mine-mouth power plants with which PLN will be signing power purchasing
agreements this month.

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Link to Original Article:
http://fossilfuel.energy-business-review.com/news/blackgold-china-huadian-si
gn-agreement-on-600mw-indonesian-power-plant-120617-5840161

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com