Report on Marubeni Corp development of Rantau Dedap geothermal power plant project

---

---

Supreme Energy Rantau Dedap (“SERD”) has entered into a Power Purchase Agreement (“PPA”) signing with Indonesian state-owned electricity utility Perusahaan Listrik Negara (“PLN”) for the development of Rantau Dedap Geothermal Project located in the South Sumatra Province of Indonesia.
 
The Rantau Dedap Geothermal Project is a geothermal power plant project under the Second 10,000 MW Fast Track Program, which includes 4,000 MW of geothermal power.  It follows the Muara Laboh and Rajabasa geothermal projects that were signed in 2012.
 
In December 2010, Supreme Energy and GDF Suez acquired the right to develop a geothermal power plant in the Rantau Dedap region through a public tender with Marubeni Corporation (“Marubeni”) entering the joint venture agreement in June the following year.  SERD are a special purpose company established by Marubeni, Supreme Energy and GDF Suez as a result of the coalition.
 
All parties involved are focused on the development of geothermal energy in Indonesia to support the government program in meeting fast growing energy needs and establishing a more environmentally friendly energy mix with an increased proportion of renewable energy. 
 
With the world’s largest estimated geothermal resources and rapidly growing electricity demand, the Indonesian government is proactively laying groundwork to expand development of geothermal power plants.  The Project is part of the Indonesian government’s electricity development program (the Fast Track Program II) and holds an important place for the future development of geothermal energy in Indonesia. 
 
Signing of PPA marks a key milestone as it defines the contractual rights and obligations of the parties during the exploration phase, construction phase and operation phase – conditions which are necessary to start exploration drilling activities. 
 
Under the agreement, SERD will develop the geothermal resources in the Rantau Dedap area and construct a geothermal power plant with a generating capacity of 220MW and an estimated value of $900 million.  The target commercial operation is scheduled in 2016 and the electricity generated by the Project will be supplied to PLN based on the PPA.
 
SERD expects to procure main equipment of its power plant from Japanese manufacturers and secure financing through project finance with the assistance of international commercial banks and export credit agencies such as Japan Bank for International Cooperation.
 
The signing was done by President & CEO of SERD, Supramu Santosa and President Director of PLN, Nur Pamudji, witnessed by Minister of Energy and Mineral Resources, Jero Wacik.  The Ministry of Finance will issue a Government Guarantee Letter to the project company pursuant to Minister of Finance Regulation No. 139/PMK.011/2011 on PLN’s Business Viability. 
 
Lubis Ganie Surowidjojo represented the Indonesian Ministry of Finance in relation to the development of Rantau Dedap geothermal power plant project.  LGS is widely recognised for its Corporate and Commercial Law expertise in Indonesia.  LGS has several core practices, with the main focus in recent years being on acquisitions of companies.  Particularly cases involving complex issues on corporate and debt restructuring, mining, as well as significant deals in the capital market.
 
The other law firms acting on the transaction were Hadiputranto, Hadinoto & Partners which acted for Marubeni Corporation and Murdono Law Firm on behalf of PLN.