BlackGold Natural Resources has entered into an agreement with various parties to form a consortium for the development of a coal-fired power plant in Riau province of Indonesia. The Riau-1 project involves development, construction, operation and maintenance of a 2 x 300MW coal-fired power plant.
The consortium consists of Singapore-listed BlackGold, China Huadian Engineering, BlackGolds subsidiary PT Samantaka Batubara (SB), PT Pembangkitan Jawa-Bali (PJB) and PT PLN Batubara (BB). PJB and PLN BB are both units of Indonesian state-owned electricity company PT Perusahaan Listrik Negara (PLN).
The consortium will establish a joint venture company, which will enter into the relevant power purchase agreement with PLN and construct and commission the Riau-1 Project.
It is anticipated that BlackGold, China Huadian and PJB will hold equity interests in the joint venture company. The agreement will result in power generation company PJB being project leader.
China Huadian will secure lenders for the financing of the project while PT SB and PLN BB will jointly ensure the supply of coal from PT SBs nearby mining concession to the Riau-1 project for the duration of the agreement.
PT SB recently signed an amendment to its coal sales and purchase contract with PLN, which increases the selling price in the long-term offtake agreement by approximately 10%.