News

The funding of the Paiton I power project in Indonesia has been successfully concluded through the joint efforts of the Export-Import Bank of the United States (Ex-Im Bank), Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI) of Japan, and the Overseas Private Investment Corporation (OPIC) of the United States.

An Ex-Im Bank $381 million direct loan to PT. Paiton Energy, JBIC financing of $844 million, NEXI financing of insurance coverage of commercial bank financing of $337.6 million, and an OPIC guarantee of $200 million of investment all contributed to the successful restructuring of the Paiton project. In addition, bondholders and 38 commercial banks provided $307 million in financing

The U.S. and Japanese trade agencies are gratified that the restructuring of the project was successfully concluded through their cooperation and that of the project, the bondholders and the commercial lenders.

PT. Paiton Energy, the project company, is principally owned by Edison Mission Energy, Irvine, Cal., General Electrical Capital, Stamford, Conn., and Mitsui and Co. Ltd. of Japan

The Paiton I plant, a 1,230-megawatt coal fired power plant in East Java, is Indonesia's first and largest independent power project. The project achieved financial close in 1995 and the plant was commissioned in 1999.

In 1995, Ex-Im Bank provided a $540 million loan guarantee covering political risk during the construction phase of the Paiton project, which subsequently was reduced to $507 million because of decreased funding needs. The financing agreement called for Ex-Im Bank, at completion of project construction, to convert its guarantee to a direct loan to take out the commercial lenders subject to the satisfaction by the Paiton project of certain conditions. However, conversion of the Ex-Im Bank guarantee to a direct loan was delayed by the Asian financial crisis. The successful restructuring of the project's debt was completed on Feb. 14, 2003.

In 1995, JBIC (formerly known as J-EXIM) provided an $855 million export credit along with 36 commercial banks. JBIC provided $513 million and the commercial banks provided $342 million. As a part of the restructuring, JBIC accepted to change the repayment schedule, and to change the interest rate from a fixed rate to a floating rate.

OPIC originally provided an investment guarantee of $200 million, funded by issuance of Certificates of Participation. As a part of the restructuring, the original Certificates were redeemed and new Certificates were issued.

NEXI (formerly known as EID/MITI) originally insured 31,806 million yen (approximately $360 million U.S. dollars) financed by the commercial banks in Japan for the project. NEXI will maintain the original insurance coverage for the project after the restructuring.

Ex-Im Bank is an independent federal government agency that helps finance the sale of U.S. exports, primarily to emerging markets, by providing loans, guarantees, and export credit insurance. In fiscal year 2002, Ex-Im Bank authorized financing to support approximately $13 billion in U.S. exports worldwide.

JBIC is a governmental financial institution with the purpose of contributing to the sound development of Japan and the international economy and community by undertaking lending and other financial operations. In fiscal year 2001, JBIC committed financial support of up to 1,948.6 billion yen (approximately $15 billion U.S. dollars). This included 1,260.8 billion yen (approximately $9 billion U.S. dollars) for international financial operations, and 687.8 billion yen (approximately $5 billion U.S. dollars) for overseas economic cooperation operations. The outstanding loans and investments were 21,737.1 billion yen (approximately $163 billion U.S. dollars) as of March 31, 2002, and guarantees amounted to 87.3 billion yen (approximately $1 billion U.S. dollars). For more details, please see JBIC web site (http://www.jbic.go.jp).

NEXI was established in April 2001 as the Japanese Export Credit Agency. For the past 50 years before NEXI's establishment, the trade and investment insurance business of Japan had been operated under the name EID/MITI (Ministry of International Trade and Industry). In fiscal year 2001, the underwritten amount by NEXI, as a result of its contribution to the growth of Japanese exports and to the expansion of overseas investment was 10,137 billion yen (approximately $76.2 billion).

OPIC's political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency's 32-year history, OPIC has supported $145 billion worth of investments that have helped developing countries to generate over $11 billion in host government revenues and create over 680,000 host country jobs. OPIC projects have also generated $65 billion in U.S. exports and created more than 254,000 American jobs.