TOKYO- Sumitomo Corp, Japan's third-biggest trading house, said on Monday a consortium led by the state-backed Japan Bank for International Cooperation would lend it 160 billion yen ($1.7 billion) in syndicated loans for an Indonesian power project.
JBIC, which provides financing for acquisitions of natural resources and other assets for resource-poor Japan, has been playing a bigger role in domestic companies' project financing as the global financial crisis freezes up credit markets.
JBIC will provide 60 percent of the debt financing Sumitomo needs to double the capacity of its Tanjung Jati B coal-fired thermal power plant in Indonesia, a company spokesman said.
As part of the expansion, Sumitomo plans to build two 660-megawatt power generation plants next to its 1,320 MW existing plants located in the central part of Java island. The total project cost is 200 billion yen.
Sumitomo aims to tap strong demand for electricity in Indonesia, where the market is expected to grow 7 percent a year up to 2016, the company said.
The two new plants will be leased to Indonesian state-owned power company PT Perusahaan Listrik Negara.
The other lenders in the consortium are Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corp and BNP Paribas.
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