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Asahan 1 Hydroelectric Power Plant

$160 million
Summary of Proposed Guarantee

Project description

This summary covers non-shareholder loans from lenders yet to be identified, to PT Bajradaya Sentranusa (BDSN), an independent power producer, to refinance the Asahan 1 Hydroelectric Power Plant in Indonesia through an IFC B Loan. BDSN has applied on behalf of lenders yet to be identified, for a MIGA guarantee of up to US$ 160 million for a period of 17 years against the risks of currency inconvertibility and transfer restriction, expropriation, war and civil disturbance, and breach of contract.

The Project is a fully operational 180MW run of river hydroelectric power plant completed in 2010, and selling electricity to PT Perusahaan Listrik Negara (Persero) (PLN), the national utility company, pursuant to a Power Purchase Agreement expiring on December 31, 2040 on a take-or-pay basis. BDSN is owned by Fareast Green Energy Ltd, PT Pembangkitan Jawa Bali (PJB) a subsidiary of PLN, and IFC, among others. The Project is located 25 km downstream of Lake Toba on the Asahan River in North Sumatra, and 130 km southeast of the city of Medan.

Environmental Categorization

The project is a category B under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary prepared by the IFC for their investment in the project.

Development Impact

MIGA’s proposed support for the investment is aligned with the WBG’s Country Partnership Strategy to increase sustainable energy and improve access to reliable electricity, and to support national infrastructure programs that are essential for economic growth and improving the lives of Indonesians across the archipelago.

The Project is a cornerstone of Indonesia’s regional electricity grid, generating dependable low-cost electricity to plug the perennial supply gap in North Sumatra, and bolstering the country’s commitment to increase the share of renewables in its total energy mix. Moreover, the refinancing of the brownfield asset has the potential to diversify the pool of private investors and attract institutional investors which have traditionally not been active in the Indonesian energy sector.