70 MW expansion at Salak geothermal plants to operate 2022/ 2023

Salak geothermal power plant, Indonesia (source: BCPG)

PT Barito Pacific Tbk (BRPT) is preparing to expand the Salak Binary geothermal power plant (PLTP) and Salak Unit 7 PLTP in 2021, as reported locally by Investor Daily in Indonesia.

The two projects with a total capacity of 70 MW are targeted to operate commercially in 2022 and 2023, respectively. Barito Pacific President Director Agus Salim Pangestu said that his party could not reveal the investment value, because the two PLTP projects that will be worked on by the company’s subsidiary, Star Energy Geothermal, are still in the preliminary study stage.

As planned, Salak Binary will have a capacity of 15 MW, while the Salak Unit 7 will be 55 MW. The two projects will be in the exploration area of ??Mount Salak, West Java.

“We are still calculating the value of capital expenditure (capex ) in 2021. The numbers are not final. In Star Energy’s geothermal business, capex is usually for regular drilling programs , ”said Agus during a virtual public meeting last week.

Until now, Star Energy already has a PLTP with a capacity of up to 875 MW in three operating assets, namely Wayang Windu, Salak, and Darajat. Apart from Star Energy, Barito Pacific through the consortium company PT Indo Raya Tenaga also continues the construction of PLTU Jawa 9 and 10 with a capacity of 2×1,000 MW.

Meanwhile, the geothermal business contribution to the company’s profits this year is estimated to be greater than the profits from the petrochemical business, PT Chandra Asri Petrochemical Tbk (TPIA). This is because petrochemical margins tend to be lower during a pandemic. Agus admitted that when he acquired Star Energy in 2018, his party hoped that the company’s performance would be more stable.

On the other hand, Chandra Asri is preparing plans for large projects such as CAP II while hoping that the price of petrochemical products will improve. Barito Pacific Finance Director David Kosasih added, the company, which focuses on the domestic market, did not experience any disruption in demand until September 2020. However, there was a price correction factor that was triggered by the pandemic. In the third quarter of 2020, petrochemical prices began to improve in line with the resumption of global industrial activity, especially in China.

“Industrial activity will boost demand for commodities and ultimately drive better prices, so that marines can rise quite high. We estimate this trend will continue in the fourth quarter, ”he explained. Bonds 2021 According to David, the company is always open to seeking external funds from rupiah bonds, including next year. The issuance of bonds is usually used by the company for a debt management strategy. Towards the end of this year, the company will complete the continuous public offering (PUB) I program.

“PUB is planned regularly. The value of the new PUB has not been determined. We will continue to monitor the condition of the capital market  in the future, ”he explained. For information, currently Barito is holding a Phase III continuous bond offering worth IDR 386.52 billion. The proceeds from the issuance will be used to pay part of the debt from the US $ 200 million loan. The company issued bonds in three series, namely Series A worth Rp. 167.52 billion with an interest rate of 8.25% per year and a period of 370 days. Then, Series B worth IDR 56 billion with an interest rate of 9.25% per year and a term of three years. Meanwhile, Series C is valued at Rp. 163 billion with an interest rate of 10.25% per year and a tenor of five years. PT Pemeringkat Efek Indonesia (Pefindo) has given rating A regarding the issuance of these bonds.

Barito Pacific appointed PT Indo Premier Sekuritas, PT Shinhan Sekuritas Indonesia, and PT Trimegah Sekuritas Indonesia Tbk (TRIM) as underwriters.

“All of the proceeds will be used to pay off part of the debt based on the facility agreement related to US $ 200 million single currency term facility dated December 19, 2019. Part of the obligation the company pays is in the form of loan principal,” explained management in the prospectus recently. Barito Pacific scheduled a bond public offering period on 1-3 December 2020.

Furthermore, the electronic bond rationing and distribution period is scheduled for 4 and 8 December 2020 respectively. These bonds will be listed on the Indonesia Stock Exchange (IDX) on 9 December 2020. The sustainable bonds I Barito Pacific have a ceiling of IDR 1.5 trillion. The company has carried out the issuance of phase I and II in 2019, with the issuance value of IDR 750 billion and IDR 363.48 billion, respectively.

Source: Investor Daily