Enron Java Power Corp.
MIGA issued a $60 million guarantee contract to Enron Corporation of the United States for its equity investment in a 500-megawatt gas-fired, combined cycle power plant near Surabaya, Indonesia. MIGA's guarantee covers the risks of expropriation, transfer restriction, and war and civil disturbance. The guarantee is issued under the Underwriting Program, and MIGA's exposure is $15 million.
The project enterprise, P.T. East Java Power Corporation, will improve the availability and reliability of electric power in Indonesia and account for 3 to 5 percent of the country's total electricity production. Indonesia will benefit from the project's utilization of local natural gas rather than oil, which will continue to be exported to earn foreign exchange.
The project will create about 800 jobs during the construction phase and 45 permanent jobs. An additional 90 people will be hired by contractors for maintenance and other services. Employees will receive substantial technical and managerial training, including training in power plant operation and maintenance and gas turbine and combined cycle technology. The local community will benefit from the installation of electricity transmission lines, the building of a new road, and the improvement of an existing road with drainage and lighting. Domestic businesses also will benefit from the local sourcing of goods and services.