UPC Sidrap, OPIC join hands to develop $120m wind farm in Indonesia

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Photo by UPC Group

PT UPC Sidrap Bayu Energi, a subsidiary of US renewable energy company UPC Group, has signed a $120 million  financing deal with Overseas Private Investment Corporation (OPIC), to finance the development of Indonesia’s largest wind farm in South Sulawesi.

The agreement was signed by president and CEO of OPIC Elizabeth L. Littlefield and UPC Sidrap president director Brian Caffyn on April 8.

The funds will be used to finance the development, construction, commissioning and operation of the wind farm with a generating capacity of 70 megawatt in South Sulawesi.

“PT UPC Sidrap Bayu Energi will be a transformative project that will provide clean renewable energy to Indonesia. With the financing of this utility scale wind power deal, we are helping Indonesia accelerate its renewable energy development while improving the lives of local communities by providing reliable power,” said Elizabeth.

Also Read : India: ReNew Power to raise up to $250m in debt financing from OPIC

Brian added the Sidrap wind farm project will be Indonesia’s first utility scale wind farm project.

“UPC is proud to be able to bring a new power generation form to Indonesia at an affordable price and hopes to be able to replicate this success in other similar projects and provide low cost renewable energy for the benefit of PLN and the people of Indonesia,” Brian said.

The wind farm will be developed by UPC Sidrap Bayu Energi together witha a local partner PT Binatek Energi Terbarukan.

UPC Sidrap Bayu Energi said the wind farm aims to help generate a clean source of power and contribute to the Government of Indonesia’s energy goals of increasing renewable energy use from 6 per cent of the generation mix in 2014 to 23 per cent by 2025.

According to the Investment Coordinating Board, number of investors from Europe, United State and Qatar are in talks with the Indonesian government for collective investment of around $1.3 billion in the sectors of renewable energy and power plants in the country.

BKPM Chairman Franky Sibarani said, that several European companies have collectively offered up to $630 million in investment proposals in renewable energy projects in Indonesia.

BKPM has received investment proposals worth $380 million from an unnamed Italian power company last week, he added The Italian company hopes to build two power plants in Riau province – a $280 million steam powered plant with a capacity of 250 megawatts (MW) and a $100 million geothermal power plant with a capacity of 55 MW.

Sibarani also cited another investment proposal from the United Kingdom which entails building of a 200 MW solar plant with an estimated investment of $250 million.

Meanwhile, the US ambassador Robert Blake, as quoted by the US Embassy in Indonesia, said that the US plans to implement a $500 million program in Indonesia that will help catalyze investment in renewable energy, preserve carbon-rich primary forests and encourage sustainable forest management.

Another company that is looking to build natural gas-fired power plant project in the country is Qatar’s Nebras Power. The company has signed an agreement with state own electricity producer PT Peurahaan Listrik Negara to conduct a feasibility study.

It plans to build 500 MW plant and expects to kick off commercial operations by 2019. According to Nebras press release in Qatar bourse, as part of the agreement, the company is also looking to invest in a floating storage and regasification unit (FSRU) for liquefying natural gas to supply part of the electricity needs of North Sumatra.

Nebras Power is an infrastructure investment firm which is 60 per cent owned by Qatar Electricity and Water Company, with the remainder split between Qatar Petroleum and Qatar Holding.

Also Read: Indonesia may get $1.3b investment in renewable energy projects