Astra's United Tractors Bids on Massive Power Plant Project

United Tractors, heavy equipment and mining contractor of Astra International subsidiary, is currently bidding for 900-megawatts (3x300) for three tender projects of coal-fired power plants worth $1.8 billion in total as the part of the company's effort in diversifying their business, a senior official from the company said on Friday (4/11). (Antara Photo/Sigid Kurniawan)

By : Sarah Yuniarni & Farid Firdaus | on 2:50 PM November 05, 2016
Category : Business, Corporate News

Bogor. United Tractors, the heavy equipment and mining contractor of the Astra International, is currently bidding on a 900 megawatt coal-fired power plant project worth $1.8 billion as part of the company's efforts to diversify, a senior official said on Friday (04/11).The company, which trades on the Indonesia Stock Exchange as UNTR, planned to form a consortium with Chinese investors for one of the planned power plant projects. While it is yet to be announced which specific project the consortium will work on, projects are slated for East and South Kalimantan and the Bangka Islands in Sumatra. United Tractors will seek out a 20 to 50 percent stake in the consortium.

"We are also asking local companies to join the tender, " United Tractors financial director Iwan Hadiantoro said on Friday.

Meanwhile, United Tractors will postpone is financial of 2,000-megawatt Tanjung Jati B 5 and 6 units of the coal-fired power plant expansion in Central Java by early 2017."There is no hampering factor in our decision to postpone the financial closing. This is just mainly the technical agreement," Iwan added. The company initially planned the financial closing to take place by the end of the year, but was delayed while waiting for syndication from eight international banks.

The fifth and sixth power plant projects — to be carried out by United Tractors and Japanese heavy machinery and mining firms Sumitomo and Kansai Electric Power — will expand Tanjung Jati B first to fourth unit power plants.

The fifth and sixth power plants are worth a total $4 billion and will be 80 percent funded, or $3.2 billion, via six Japanese and two French banks, with the remainder coming from the company's equity.

According to Iwan, progress is on target and completion is slated for 2019. The expansion project would almost double the 2,640 megawatts power of Tanjung Jati B power plant current capacity.

United Tractors and Kansai Electric Power both hold 25 percent in the project, while Sumitomo controls 25 percent.

UNTR is branching out its business to power sector as it is the part of the company's strategy to minimize losses from low commodity prices.

The power sector business is in line with the government's effort to add 35,000 megawatts to the national power grid in order to boost the investment.

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