PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 569
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2014 AND 2013
Expressed in thousands of US Dollars, unless otherwise stated
42. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
q. Long-term Power Purchase Agreement for the Central Java Coal-Fired Independent Power Producer Project “IPP”
The Group, together with Electric Power Development Co Ltd. “JPower” and Itochu Corporation “Itochu”, formed a consortium - the “JPower-Adaro-Itochu” Consortium - to undertake the project. In July 2011 the Consortium
established BPI, in which the Group, through its subsidiary, AP, JPower and Itochu own participating interests of 34, 34 and 32, respectively, to build, own and operate a coal-fired power plant.
On 6 October 2011, BPI and PLN signed a long-term Power Purchase Agreement “PPA”. The PPA includes the construction of a coal-fired power plant with a total capacity of 2x1,000 MW in the Province of Central Java Central
Java Power Plant“CJPP” and a 25-year supply of electricity to PLN. Upon expiration of the PPA term, the CJPP project will be transferred to PLN. In addition to the PPA, a Guarantee Agreement was also signed by and between the
Government of the Republic of Indonesia, PT Penjaminan Infrastruktur Indonesia Persero and BPI, which in this case, guaranteed PLN’s payment obligations for BPI under the PPA.
Due to the acquisition of the remaining plots of land is beyond the reasonable ability and control of BPI and that the acquisition may only be possible with the Government’s and PLN’s support, on 16 February 2015 BPI and PLN executed
Amendment to the Power Purchase Agreement. Under this amendment, PLN will perform - on a best endeavor basis - land acquisition activities for the Project pursuant to Law No. 2 of 2012 regarding Land Procurement for Development
in the Public Interests. With this development, management is of the opinion that the investment in BPI is not impaired because management believes that the implementation of Law No. 2 of 2012 by PLN will bring certainty to the eventual
completion of the land acquisition and thus allowing the Project to continue.
The scope of PLNs land acquisition is limited to Project land that are not yet acquired by BPI remaining land. A separate land lease agreement will be entered into prior to financial close to provide lease to BPI for purposes of
implementing the Project.
r. Long-term Power Purchase Agreement for the South Kalimantan Coal-Fired Independent Power Producer Project “IPP”
The Group, together with Korea East-West Power Co, Ltd., formed a consortium with participation interests of 65 and 35, respectively. On 12 August 2013, the Consortium established PT Tanjung Power Indonesia “TPI” to build, own,
operate and transfer a coal-fired power plant.
On 15 October 2014, TPI and PLN signed a long-term Power Purchase Agreement “PPA”. The PPA includes the construction of a coal-fired power plant with a total capacity of 2x100 MW in the Province of South Kalimantan South
Kalimantan Power Plant“SKPP” and a 25-year supply of electricity to PLN. Upon the expiration of the PPA term, the SKPP project will be transferred to PLN. This project is included in the Fast Track Program Project phase 2 FTP-2, with
the BOOT Build, Own, Operate and Transfer scheme, and benefits from a Government guarantee in the form of a Business Viability Guarantee Letter “SJKU”. The project is currently at the initial implementation stage.
s. US270,000 Guaranteed Bridge Facility Agreement
On 3 August 2012, BPI, a joint venture, entered into a US270,000 Guaranteed Bridge Facility Agreement with various financial institutions. The US270,000 Guaranteed Bridge Facility was to expire 364 days after the date of this
agreement. This agreement has been amended to extend the maturity of this agreement to 4 November 2015. The Company acts as the guarantor for the commitment of US91,800, which is equal to 34 of the total facility.
As at 31 December 2014, BPI had made drawdown totaling US217,000 from this facility.
t. Overlapping land plots of PT Bhakti Energi Persada and its subsidiaries
PT Bhakti Energi Persada and subsidiaries BEP Group have been granted mining permits in Muara Wahau, East Kutai, East Kalimantan the Concession Area. Part of the Concession Area currently overlaps with the plantation
business permit held by PT Dharma Satya Nusantara and its subsidiaries the Plantation Companies “Overlap Area”. As of 31 December 2014, BEP Group and the Plantation Companies have reached agreements for a portion of
the Overlap Area and BEP Group has paid the first installment related to the settlement. The remaining installments will be paid subject to fulfilment of certain conditions. The remaining Overlap Areas are still in the process of discussion.
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AdARo ENERgy 2014 ANNuAl REPoRT
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 570
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2014 AND 2013
Expressed in thousands of US Dollars, unless otherwise stated
42. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
u.
Convertible loan and shares subscription agreement and option agreement
On 28 May 2012, ATA entered into a Convertible Loan and Shares Subscription Agreement with BEP, PT Persada Capital Investama “PCI”, PT Triputra Investindo Arya “TIA”, PT Arya Citra International, PT Bara Murau Coal,
PT Millenium Capital Investment, Arieska Lianawati Konar Suhananto “Arieska”, Andrianto Oetomo “Andrianto” and Arianto Oetomo “Arianto” “Convertible Loan Agreement”. ATA has the option to provide loans to BEP with a
maximum facility of US500,000 within a period of three years, which has been amended to four years. By lending to BEP, ATA has the right to convert the loan into up to 51 of BEPs issued and outstanding shares plus shares to be
issued by BEP. By entering into the Convertible Loan Agreement, ATA is able to appoint the majority of BEPs Board of Directors and to govern its financial policies as well as to control BEPs operations. As a result, the Group has
consolidated BEP.
On the same date, ATA entered into an Option Agreement with BEP, PCI, TIA, Arieska, Andrianto and Arianto “Option Agreement”. ATA has the right to purchase, within three years, which has been amended to four years, from the date
of the Option Agreement, shares in BEP owned by TIA, PCI, Arieska, Andrianto, and Arianto, which represent a total ownership of 79.8. The proceeds from the purchase of the shares owned by TIA, PCI, Arieska, Andrianto and Arianto
in BEP will be used to subscribe for new shares in the company up to a maximum of 2,381,729,663 full amount shares.
ATA has the option to execute either one of the agreements mentioned above.
v. US15,000 Guaranteed Bridge Facility Agreement
