Indonesia's foreign exchange reserves hit a record high at the end of September, the central bank said on Friday (06/10), attributing the increase to rising export proceeds and auctions of the bank's forex bills.(Reuters Photo/Rick WIlking)

Pupuk Indonesia Subsidiary Secures $63.6m Loan from Bank SMBC


JULY 29, 2016

Jakarta. Pupuk Indonesia Energi, a subsidiary of state-controlled fertilizer company Pupuk Indonesia, secured a $63.5 million loan from Japanese-controlled lender Bank Sumitomo Mitsui Indonesia, known as Bank SMBC.

The loan will be used to help fund a 22 MegaWatt Gresik Gas Co-generation power plant project'in Gresik, East Java. Cogeneration refers to the simultaneous production of power and heat in a plant.

Pupuk Indonesia intends to build its own power plant to its growing energy needs.

PI Energi chief Tentaminarto, the president director of Bank SMBC Kazuhisa Miyawa signed the loan agreement on Wednesday (27/7).

The loan comes with eight year tenure that can be extended for three more years.

PI Energi focuses its business in providing electricity supply to companies affiliated to Pupuk Indonesia.

Tentaminarto said the Gresik Gas Cogeneration Plant was kicked off at the end of November last year and is targeted for completion by Sept. 2017. Commercial operation are slated to begin Nov. 2017.

PI Energi is 50 percent controlled by Pupuk Indonesia with the remainder held by other state-fertilizer companies Pupuk Sriwidjaja Palembang, Pupuk Kalimantan Timur, Pupuk Kujang and Pupuk Iskandar Muda.

State-petrochemical company Petrokimia Gresik and state-owned engineering company Rekayasa Industri also owns some stakes in PI Energi.