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Wärtsilä’s engine deliveries even up high demand peaks of electric power in Indonesia

Finnvera provides a EUR 84,6 million buyer credit guarantee for the financing of Wärtsilä power plant delivery to Indonesia. Wärtsilä will supply a total of 22 W34DF dual fuel engines plus auxiliaries to the Riau peaker power plant.
Sketch of Riau power plant

Finnvera provides a buyer credit guarantee for the financing of Wärtsilä power plant delivery to Indonesia. The guaranteed credit amount is EUR 84,6 million with a repayment period of 10 years. The guarantee holder is Mizuho Bank, Ltd. Finnish Export Credit Ltd (FEC), a Finnvera subsidiary, is funding the credit arranged by the bank for PT Perusahaan Listrik Negara (Persero) (PLN), the Indonesian government-owned electricity company. This project is already the fifth Finnvera guaranteed Wärtsilä power plant delivery to PLN in Indonesia.

“The competition between equipment suppliers in capital goods exports is very tough, and the ability to offer export finance may turn out to be a decisive factor. Long term export credit agency backed financing was a prerequisite for PLN in the Riau peaker project, and as in several precedents PLN made an overall assessment of the financial terms in conjunction with the technical and commercial offers to choose the preferred supplier. This project is a good example of a contract in which a guarantee and export credit solution offered by Finnvera and FEC provide a basis for long-term buyer credit at a competitive price helping us to win the contract,” says Andreas Back, Senior Manager Financial Services at Wärtsilä.

“Finnvera and PLN go back a very long way, and we have very good experience from our four previous transactions with PLN. We are very pleased to have yet again been part of a new transaction where we, for our part, have been able to contribute to Finnish world leading technology being utilized in power generation in Indonesia,” says Cecilia Saarnia, Senior Adviser at Finnvera.

Wärtsilä will supply a total of 22 W34DF dual fuel engines plus auxiliaries to the Riau peaker power plant. The new plant will have a capacity of 200 MW and supply electricity to the national grid in the Riau and Sumatra regions. The region has a need for additional reliable power supply capacity, which the new facility will help to secure primarily during times of high demand, which typically occur during evening hours. The new plant will be built in the Riau Province on Sumatra Island, close to the Balai Pungut Village within to an existing power plant complex. The new power plant will increase the power plant capacity in the complex from 235 MW to 435 MW in total. 

Environmental and social impacts are assessed as part of responsible financing

A large thermal power plant project such as this falls into the highest environmental and social risk category, category A. To assess the environmental and social impacts and risks of the project an external consultant was appointed. Representatives of Finnvera also visited the site and among other things, met with representatives of the affected communities. The project has prepared an environmental and social impact assessment in accordance with the Indonesian legislation.

Finnvera conducted its own due diligence to assess and benchmark the impacts and risks against the applicable international standards. An environmental and social action plan was drawn based on the identified gaps. The project is required to implement the plan in order to reach the level set out in the Indonesian legislation and to align itself with the international standards. An external consultant shall monitor the implementation of the plan and the compliance of the project with the applicable standards.

Exporter: Wärtsilä
Guarantee Holder: Mizuho Bank, Ltd
Arranger: Mizuho Bank, Ltd
Lender: Finnish Export Credit Ltd
Borrower: PT Perusahaan Listrik Negara (Persero), a company incorporated in Indonesia.
Buyers: Bagus Karya Limited, Hong Kong and consortium KSO Bagus Karya Aecom Cogindo, Indonesia
Export transaction/Goods: Delivery and installation of 22 Wärtsilä 20V34DF generating sets, ancillary equipment and services to a 200 MW gas engine combined cycle power plant to be constructed and located in Riau, Duri, Indonesia.
Country of Export transaction: Indonesia
Guaranteed amount: EUR 84.6 million
Credit period: 10 years
Project classification: A
Environmental and social impact information: Construction of a gas engine combined cycle power plant. Main items of the E&S review were noise and air emissions originating from the power plant, the expectations and complaints from the affected communities and potential impacts on the local biodiversity. 
International standards applied in benchmarking: IFC Performance Standards and relevant EHS Guidelines. 
Contact point: environment (at)
Information published: 23 April 2020

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