Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract
signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration
and contract signing and reflect the terms of the project at the time of contract signature. Environmental
and Social Review Summaries are provided for projects assigned an Environmental Assessment
Category of A or B
Project name - Rajamandala Hydropower Project
Project ID - 11862
Fiscal year - 2015
Status - Active
Guarantee holder - Mizuho Corporate Bank Ltd.
Japan Bank for International Cooperation
Investor country - Japan
Host country - Indonesia
Environmental category - B
Sector - Power
Date SPG disclosed - October 04, 2013
Projected Board date - June 06, 2014
Gross exposure - $200 million
Project Type - Non-SIP
Strategic priority area - Complex Project
ESRS
Revised version in PDF, April 14, 2014
Original Version in PDF
View Summary of Proposed Guarantee
Project description
On August 7, 2014, MIGA issued guarantees of up to $200 million covering non-shareholder loans by
Mizuho Bank Ltd. and Japan Bank for International Cooperation of Japan to the Rajamandala
Hydropower Project in Indonesia. The coverage is for a period of up to 19 years against the risks of
transfer restriction, expropriation, war and civil disturbance, and breach of contract.
The project consists of the development and operation of a 47 megawatt run-of-the-river hydropower
plant near Bandung on Java Island on a build-operate-transfer basis. The plant is expected to generate
approximately 181 kilowatt hours per year that will be sold under a 30-year power purchase agreement
with PT Perusahaan Listrik Negara (PLN), a state-owned enterprise.
Despite a ramp-up in power capacity since the 1980s, the national electrification rate in Indonesia
remains at 71 percentleaving around 70 million people without access to grid electricity and forcing
them to resort to costly and unreliable forms of power. In addition, the countrys projected GDP growth of
7 percent will further increase the electricity demand.

Moreover, Indonesia currently relies excessively on expensive oil fired generation and needs to switch to
cheaper fuel sources. The proposed project will help lower the current average cost of power produced in
the country.
The power project is aligned with the World Bank Groups Country Partnership Strategy for Indonesia,
which stresses the importance of building energy capacity to sustain economic progress.
MIGAs support for this investment is also aligned with the Agencys priority of supporting investments into
complex infrastructure projects.