BlackGold Natural Resources’ subsidiary PT Samantaka Batubara (PT SB) has entered a conditional term sheet with China Huadian Engineering for the joint development of two new 300MW coal-fired power plants in Riau province, Indonesia.
The deal also includes the construction, operation, and maintenance of the Riau-1 Project. The latest agreement follows a deal that was announced in December 2015 when BlackGold signed a consortium agreement with China Huadian to provide electric power to Indonesia’s state-run power distribution company PT PLN (Persero).
BlackGold Natural Resources' chief executive officer (CEO) Philip Cecil Rickardsaid: “The signing of this Term Sheet marks the next step forward for both parties as it irons out the salient terms of the proposed joint venture between the parties.
“Leveraging on the capabilities of China Huadian in power engineering and BlackGold’s expertise in coal mining, we look towards securing the award of the bid for development of the Riau-1 Project.”
BlackGold and China Huadian are set to form a joint venture (JV) as part of the new term sheet. Consummation of the planned JV is subject to the successful award of the bid by PLN to the consortium of PT SB and China Huadian.
Commercial operation of the plant is expected to start in 2020.
BlackGold noted that the Riau-1 Project could be one of the six nine-mouth power plants PLN is planning to sign power purchase agreements.