CONFERENCE OF INDONESIAN ELECTRICAL POWER SOCIEY (CIEPS) 2013

Jakarta, 5th September 2013

PROCEDURE IN RENEWABLE IPP PROCUREMENT

GENERAL IPP BUSINESS SCHEME Special Purpose Company (SPC) to be formed

IPP

(Seller-SPC)

Company “X”

Company “Y”

LA

Foreign

Local

Lender

EPC

Contractor

EPC

Contract

O&M

Contract

O&M

Contractor

PLN

(Buyer)

FUEL Supply

Contractor

FSA PPA

A

C

D B

JVA

Consortium: 2 to 4 companies

25 % – 30% 75% – 70%

A

B

C

D

: Capital cost for Power Plant

: Fix Operation and Maintenance Cost

: Fuel Cost

: Variable Operation and Maintenance Cost.

PLN IPP Company

IGGF GOI Financiers (ECA / Banks)

Regulatory Frameworks 2 schemes of Government Guarantee

PLN IPP Company

GOI Financiers (ECA / Banks)

Public Private Partnership (PPP) Project Guarantee Agrement between GOI-IGGF-Developer

Fast Track Program 2 (FTP2) Project Business Viability Guarantee Letter from GOI to Developer

PPA

RA

GA

FA

GA = Guarantee Agreement PPA = Power Purchase Agreement RA = Recourse Agreement FA = Financing Agreement

FA

PPA

BVGL

BVGL = Business Viability Guarantee Letter GOI = Government of Indonesia IGGF = Indonesia Infrastructure Guarantee Fund

a. Presidential Regulation No 67 of 2005, 13 of 2010, and 56 of 2011

Assignment to PT PLN (Persero), to Accelerate the Development of Renewable Energy, Coal and Gas Fired Power Plants

b. Presidential Regulation No 78 of 2010

Guarantee for Infrastructure Project with scheme of the Cooperation with Private Developer through Infrastructure Entity Guarantor

c. Minister of Finance Regulation No 260/PMK.011/2010

Procedures for Providing Guarantee for Infrastructure Project through Public Private Partnership Scheme

a. Presidential Regulation No 4 of 2010 and 48 of 2011

b. Minister of Finance Regulation No 139/PMK.011/2011

Procedures for Providing the Business Viability Guarantee of PT PLN (Persero) for the Development of Renewable Energy, Coal and Gas Fired Power Plants through the Cooperation with Private Electricity Developer

Assignment to PT PLN (Persero), to Accelerate the Development of Renewable Energy, Coal and Gas Fired Power Plants

c. Minister of Energy and Mineral Resources Regulation No 15 of 2010 and 01 of 2012

List of Projects of the Acceleration Development of Renewable Energy, Coal and Gas Fired Power Plants

Update 1 Augt 2013 No. 21/2013 12169 MW : 46 HEPP, 6 GeotPP, 7 CPP

Construction Construction Operation Operation Financing Financing

PPA

IIGF •Guarantee Preparation

Transaction Advisory •Business Scheme •RFP Proposal •Bid Evaluatin

Transaction Advisory

Procurement

Preparation Preparation Bidding Bidding

Compensation scheme

GENERAL INFORMATION

PPP Project – Procurement Processes

Renewable IPP Projects Procurement Process

• Geothermal (FTP2):

• Other than Geothermal (Hydro, Wind, etc): Procurement for Renewable IPP Projects above 10 MW

Assignment from MEMR

PPA Discussion / Negotiation

PPA Signing

Procurement Process PPA Signing

Renewable IPP Projects Procurement Procedure (above 10 MW, other than Geothermal)

Acquire Location Permit

from Local Government

Submit Proposal & FS to

PLN

(DIV SIS & DIV EBT)

Review by PLN

(System

Requirement

and RUPTL)

More than 1 applicant

Direct Appointment

Process

PLN submit Application for

Direct Appointment (DA) to

MEMR

Issuance of DA from MEMR

Formation of Negotiating

Committee

Pre Qualification Process

Request for Proposal Process

Negotiation Process

Heads of Agreement / LoI PLN submit Application for

Price Approval (PA) to

MEMR

Issuance of PA from MEMR

Signing PPA : Escrow

Account, PS 1and IUPTL-S to

be made available

Financing Date (Financial

Close) : : Performance

security II, Financing

Agreement & first

drawdown, EPC contract,

land ownership to be made

available

Tender Process

Only 1 applicant

Electricity Price Structure Single Price or Capacity & Energy Price

7

1.Single Price

• Electricity price is stated in single price (Rp/kWh orUSD/kWh), covers capital cost, operating & maintenance and fuel cost (primary energy).

• Payment = Electricity price (Rp/kWh) x Electricity Production (kWh)

• Some are linked with consumer index

2.Capacity & Energy Price

• Capacity Price (linked with Availability Factor (AF, in %)):

Component A : Capital cost for Power Plant .

Component B : Fix Operation and Maintenance Cost.

Component E : Capital cost for transmission line.

• Energy Price (linked with Electricity Production (kWh)):

Component C : Fuel Cost

Component D : Variable Operation and Maintenance Cost.

Stage No. Risk PIC

Financing Stage

1 Financing risk IPP

2 Political risk during financing stage PLN

3 PLN default risk during financing stage PLN

4 Failure to achieve financial close IPP

5 Event of Force Majeure affecting either Seller or PLN IPP or PLN

Construction Stage

6 Construction risk IPP

7 Security risk (e.g. theft, sabotage) IPP

8 Design risk and construction risk IPP

9 Political risk during construction PLN

10 PLN default during construction PLN

11 Failure to reach the required commercial operation date IPP

Operational Stage

12 Operating risk IPP

13 PLN default during operation PLN

14 Coal Supply Force Majeure PLN

15 Event of Force Majeure affecting Seller IPP

16 Event of Force Majeure affecting PLN PLN

Risk Allocation in PPA PLN and IPP

8

Contact Us

Divisi Pengadaan IPP PT PLN (Persero) Kantor Pusat

Jl. Trunojoyo Blok M I/135, Kebayoran Baru Jakarta Selatan 12160

Telp : 021 722 7049 Fax : 021 725 1511

www.pln.co.id

Booklet Pengadaan IPP dapat di-download di link berikut: http://www.pln.co.id/dataweb/ipp/bookletipp.pdf

THANK YOU