The Signing of Financing Agreements for Cirebon IPP Project From Left to Right Mr. Muhammad S. Hidayat Minister of Industry, Republic of Indonesia, Mr. Hatta Radjasa Coordinating Minister for Economic Affairs Republic of Indonesia, Mr. Darwin Saleh Minister of Energy and Mineral Resources Republic of Indonesia, Mr. Dahlan Iskan, President Director state-owned electricity company PT PLN, Mr. Kim Ho Young H.E. Kim Ho- Young Ambassador of the Republic of Korea to Indonesia and Mr. Takeo Nakata President Director PT. Cirebon Electric Power

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--Supporting Japanese Business Development in Indonesia's Power Infrastructure under Framework of Policy Dialogue--

Jakarta, March 8, 2010 (ANTARA) -

1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe) signed today a project financing loan agreement with P.T. Cirebon Electric Power (P.T. CEP), an Indonesian company in which Marubeni Corporation (Marubeni) has equity stakes, to fund the Cirebon thermal power plant project (Cirebon Project). The overall loan amount totaling up to 595 million US dollars will be provided in cofinancing with private sector banks, including the Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Corporate Bank, Ltd., Sumitomo Mitsui Banking Corporation, the Tokyo Branch of ING Bank N.V., and the Export-Import Bank of Korea (Korea Eximbank), with JBIC and Korea Eximbank providing a political risk guarantee for the cofinanced portion.

2. In this project, P.T. CEP will newly construct a 660 MW thermal power plant in Cirebon, West Java, and sell electricity generated by this plant to P.T. PLN (Persero), a state-owned power utility, for 30 years.

3. According to the long-term power sector plan, Indonesia's power demand is projected to grow at an annual average of approximately 9.0% through 2027. Infrastructure development in the power sector is thus an urgent issue on the national agenda. Against this background, the Cirebon project is undertaken jointly by Marubeni, which serves as a lead sponsor, and Korea Midland Power Co., Ltd., a Korean power utility, to develop a large Indonesian power infrastructure.

4. As Japanese firms are conducting business operations in a broad range of sectors, including natural resources, infrastructure and manufacturing in Indonesia, JBIC has provided financial support for them. Through this process, JBIC has built up a firm relationship of trust with the Indonesian government. In the power sector, JBIC signed the Umbrella Note of Mutual Understanding for promoting Independent Power Producer (IPP) projects with the Ministry of Finance of Indonesia in September 2006. Further, in February 2010, JBIC and the Indonesian government agreed on holding consultation meetings on a regular basis that focus on IPP and geothermal power generation, areas where Japanese firms will have significant business opportunities, as part of the effort to further strengthen bilateral dialogue. This project was made possible through policy dialogue between JBIC and the Government of Indonesia.

5. Since power generating facilities in this project adopt technologies that produce fewer CO2 emissions than the conventional ones, JBIC's support for this project is provided under the JBIC Facility for Asia Cooperation and Environment (FACE), launched in April 2008, as well as the Leading Investment to Future Environment Initiative (LIFE Initiative), announced by the Government of Japan in March 2009.

6. With the prospect of high trend growth, Indonesia and other Asian countries are projecting increasing demand for infrastructure development. This has provided Japanese firms with major business opportunities. Under these circumstances, JBIC is committed to supporting Japanese firms for expanding overseas infrastructure development business and for maintaining and improving their international competitiveness through continued dialogue with the Indonesian government, project structuring by drawing on its variety of financial tools and its risk-assuming functions in individual projects.

Note to Editor: JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).

Project finance is a financing scheme relying on cash flows generated by a project.

In March 1995, JBIC extended a cofinancing loan in the aggregate amount of 900 million US dollars to PE to finance the procurement of power generating equipment for the Paiton thermal power project.

See News Release on September 19, 2006.
(http://www.jbic.go.jp/en/about/press/2006/0919-02/index.html)

See News Release on April 1, 2008.
(http://www.jbic.go.jp/en/about/press/2008/0401-01/index.html)

See Information on March 23, 2009.
(http://www.jbic.go.jp/en/about/news/2008/0323-01/index.html)

For further information, please contact Mr. Satake or Mr. Yorozu, Jakarta Representative Office (Tel: +62-21-5220693/ Fax: +62-21-5200975). Information on JBIC can be seen on the web site: URL: http://www.jbic.go.jp/english/index.php

Editor:
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