Power Purchase Agreement Signed
Brisbane, Oct 9, 2014 AEST (ABN Newswire) - The Board of Raya Group Ltd (
ASX:RYG) would like to announce that it has received confirmation from the Indonesian Minister of Energy and Mineral Resources granting approval to sell electricity to PT PLN (Persero). Raya recently announced it had signed a major Power Purchase Agreement (PPA) for the Sokoria Geothermal Project of which is expected to generate forecast revenue exceeding USD 775,000,000 (seven hundred & seventy five million US Dollars) over the 30 year term of this PPA.
The agreement signed between PT PLN (Persero) the National Electricity Grid in Indonesia and PT Sokoria Geothermal Indonesia (SGI), of which Raya owns 45% and joint venture (JV) partner Bakrie Power 53% is a significant milestone for the company, as it now has a revenue stream that will assist the company with moving to the next phase of project development.
As recently announced by SGI, a "Temporary Electricity Business License" (IUPTLS) has been issued to SGI from the Directorate General of Electricity in relation to the Sokoria project.
Key project and financial details for this approved POWER PURCHASE AGREEEMENT are as follows:
Item TermsModules 6 x 5MWPower Capacity 30 MW (30,000 Kw)Minimum Tariff USD 12.5c per kWhrTransmission Line 70kV interconnect to PLN incomer Ropa - EndeTerm of PPA 30 years
Total minimum revenue expected based on the following agreed formula with PT PLN (Persero) is as follows:
Power (30000kw) x Tariff (USD.125c) x Availability Factor (80%) x hours per year (8760) x PPA Term (30)
Revenue Generated over the term of this PPA based on "Availability Factor" is forecast to be USD 788,400,000 during the expected operational period.
It is important to note that SGI expects to forecast further revenue based on:
1. Annual Tariff Escalation based on "US PPI Increase"
2. An increase to the "Minimum Tariff" with additional "Transmission Power Charge" to be included following completion of transmission study
3. "Exploration Rebate" to be received upon completion of approved "Exploration Works Program"
The following timetable provides a summary of key items and indicative dates of the Sokoria project:
Key Item Indicative DateTransmission Payment Charge (TPC) Study Completed Jan 2015TPC tariff amendment finalized between SGI and PLN Apr 2015Exploration period commences Dec 2015Exploration period completed Oct 2016Request for Adjustment (RFA) to base price after studies Jan 2017Notice of Resource Confirmation (NORC) issued Jan 2017Notice of Intention to Develop (NOID) Jun 2017Transmission line completed Aug 2018Commercial Operation Date - Unit 1 Dec 2018Commercial Operation Date - Unit 2 Dec 2019Commercial Operation Date - Unit 3 Dec 2020Commercial Operation Date - Unit 4 Dec 2022Commercial Operation Date - Unit 5 and 6 2023 - 2024
Commenting on this major milestone Pak Amri Putro and Pak Andri Doni of "Bakrie Power" both said:
"The support of Raya Group and its Directors, the necessary fundamental persistence of all involved in this Joint Venture project have all contributed to this successful outcome. We extend our thanks to both "Bakrie Power" and "Raya Group" shareholders for being patient during this journey which at times has been challenging, we all now look forward to the future with further concerted efforts and focus on the outcome of profitable revenue being generated in the foreseeable future".
PT Sokoria Geothermal Indonesia (SGI) will further refine all financial model requirements; plan further required exploration, and consult with both EPC and potential Funding Partners.
Whilst the company has previously relied on potential funding partners to further develop the Sokoria project, the company is now in a much stronger position to explore all options available for the best commercial outcome for its shareholders.
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