Korea Trade Insurance Corporation (K-Sure) announced on November 10 that it will provide an overseas business financing insurance worth US$141 million (163.42 billion won) to Indonesia’s Hasang Hydroelectric Power Plant project which is led by LG International Corporation.
The Hasang Hydroelectric Power Plant project plans to construct a 41-megawatt conduit type hydroelectric power plant in the northern area of Sumatra Island in Indonesia as part of the Indonesian government’s “Fast Track Ⅱ” Program, which is designed to deal with the country's power shortage problem. The project will be carried out with private capital under the Build-Own-Operate (BOO) method, by which private companies construct the plant, hold ownership over the plant, operate the plant, and collect their returns on investment costs.
For the project, LG International will have a 95 percent investment stake, while K-Sure and POSCO Engineering will be participated in as an operations and maintenance (O&M) company and engineering procurement construction (EPC) company, respectively. The Indonesian government will guarantee the obligation of the state-owned Indonesian electricity company to purchase power.
A total of US$211 million (244.55 billion won) will be injected to the Hasang Hydroelectric Power Plant project. For the US$211 million (244.55 billion won) project, creditors, including the Korea Development Bank, will raise US$148 million (171.53 billion won) and K-Sure will supply US$141 million (163.42 billion won), about 95 percent, through the overseas business financing insurance.
An official from K-Sure said, “The support to the Indonesian project is part of the follow-up measures after the government drew up a revised supplementary budget worth 360 billion won (US$310.61 million) in September in order to help Korean firms to push into the emerging market and take part in overseas projects.”