BlackGold, China Huadian and PLN subsidiaries sign Heads of Agreement for cooperation on Riau-1 Project
SINGAPORE — BlackGold Natural Resources Limited (the “Company”, and together with its subsidiaries, the “Group” or “BlackGold”) is pleased to announce that, on 15 September 2017, it entered into a Heads of Agreement (the “HOA”) with various parties to form a new consortium (the “Consortium”) in relation to an ongoing cooperation project for the development, construction, operation and maintenance of a 2 x 300 MW coal-fired power plant in Riau province, Sumatra, Indonesia (the “Riau-1 Project”).
The Consortium shall consist of i) the Company; ii) China Huadian Engineering Co., Ltd (“CHEC”); iii) PT Samantaka Batubara (“PT SB”), a subsidiary of the Company; iv) PT Pembangkitan Jawa-Bali (“PJB”); and v) PT PLN Batubara (“PLN BB”). PJB and PLN BB are both wholly-owned subsidiaries of PT Perusahaan Listrik Negara (“PLN”).
The addition to the Consortium of certain subsidiaries of PLN and the signing of the HOA follow earlier announcements made by the Company on 28 December 2015 regarding BlackGold’s entry into a consortium agreement with CHEC for participation in a bid to provide electric power to PLN and on 12 June 2017 regarding BlackGold’s signing of a conditional term sheet with CHEC. The HOA supersedes both of these previous agreements.
Pursuant to the HOA, upon the successful award of the Riau-1 Project by PLN to the Consortium, the Consortium will establish a joint venture company (“NewCo”) which will enter into the relevant power purchase agreement (“PPA”) with PLN and construct and commission the Riau-1 Project. It is anticipated that the Company, CHEC and PJB (through its appointee and other PLN subsidiaries) will hold equity interests in NewCo.
Under the HOA, amongst others, PJB (through its appointee) shall be appointed as the project leader. CHEC shall secure lenders, on a best efforts basis, for the financing of the Riau-1 Project and will fulfil the technical criteria for the Riau-1 Project in accordance with a procurement document to be issued by PLN. PT SB and PLN BB will jointly ensure the supply of coal from PT SB’s mining concession to the Riau-1 Project for the duration of the PPA.
Mr Philip Cecil Rickard, Chief Executive Officer of the Group, commented: “The entrance of PJB into the Consortium is a mark of endorsement by PLN. We are thrilled to be embarking on this ground-breaking collaboration with our strong, state-owned partners in our bid for the Riau-1 Project. BlackGold shall continue to focus on the prospect of supplying coal on a longterm basis to the Riau-1 Project over the duration of the PPA.”
Information on PLN, PJB, PLN BB, CHEC and the Riau-1 Project
PLN is Indonesia’s state-run power distribution company. PJB and PLN BB are both whollyowned subsidiaries of PLN.
PJB is a power generation company with the aim of promoting Indonesia’s economic development by providing high-quality, reliable and sustainable energy supply.
PLN BB provides support to its parent company, PLN, for the obtainment of coal for generation of electricity.
CHEC is a state-owned power engineering company in China. CHEC’s core businesses encompass high tech product research and development, engineering design, general contracting, as well as energy technology research and services. CHEC is currently involved in project construction, investment, operation and maintenance of various power projects located in Indonesia.
The Riau-1 Project is listed as one of the planned mine-mouth power plants in the 2017 National Electricity Supply Business Plan (the “2017 RUPTL”), with commercial operation date expected to start in 2020.