Contact De eed Sn eee nnd etn eee redone reece) Prone} ean eek ten eae aa eto eee ne ert nen ee eee ar ey a een ee ee ee ee gn sas ees eee ee eee reat ere ee ere ee Ce ee ere ty pier e eer neta? cy ee en ane ao) ceaTaN me PVE DIVISION GENERAL TERMS IN IPP BUSINESS IN PLN ' Independent Power Producer (IPP): A special purpose company (SPC), which is formed by sponsots) or consortum, to execute a power purchase agreement with PLN and to develop, build, own and operate a power pant. * SELLER: term forthe IPP used in the agreement. * BUYER: torm for PLN used in the agreement ' Performance Securiy: a certain amount of performance bond to be submitted by an IPP to PLN. There are two Performance Securities (PS): PS stage I that covers Financing Period and to be submitted onthe agreement signing date; and PS stage Il that covers, the construction period and to be submitted onthe Financing Dato, * Pre ~ Qualfication:_@ process to qualfy consortiums) based on certain crtera to determine that they wil be lable to partcipate inthe bidding process. The crteria, among others, ae: Technical (experionces in development O&M and EPC), Business (consortium structure) and Financial (Total Asse, Net Wort). += Request for Proposal (RF): a bidaing process, The bidders are required to submit Administration & Technical Proposal and Price Proposal “Typlcaly, those proposals are Included in one envelope and to be submit atthe same tie. The one who has passed Adminisation and Technical Proposal evaluation wil eligible for Price Proposal evaluation. 1 Powor Purchase Agreement (PPA)- an agreement betweon IPP and PLN, IPP to Soll power exclusivoly to PLN and PLN to buy power from IPP. The agreement contains terms and conditions that are binding tothe partes. * Financing Close: the date of inital drawdown, + Financing Date: the date when all of condition precedens of fancing stage has been fullled, among others: financial close, EPC contrac, land acqustion, $°C. * Commercial Operation Date (COD): the date when power plant stats to operate commercially after passing all operation requirements. orIPP PROCUREMENT DIVISION SCOPE IPP Procurement Division of PT PLN (Persero) is responsible in procuring IPP Projects (renewable & non-renewable energy) wih total net capacity above or equal to fy (60) MW, or specific project assigned by Government of indonesia c.g. MENA (eg. Geothermal project) through a Fast Track Program (FTP). This division manages the procurement processes (Including procurement preparation and procurement execution), and all necessary processes up to the accurrence of Financing Date of the project. REGULATORY FRAMEWORKS REGARDING IPP PROCUREMENT ‘A Bectiey (requler) 1) Law (UU) No, 30 year 2009 concerning Electricity 2) Government Regulation (PP) No. 14 year 2012 concerning Electricity Supply Business Actives 3) MEMR Regulation (Permen ESOM) No. o1 year 2006 jo No. 08 year 2007 concerning Procedures of Power Purchase and or Rent and Hire Power Network in Electi‘ty Supply for Publc Interest Businesses, 4) EMR Roguaton (Permen ESOM) No. 0 year 2008 concerning Guidelines for Power Purchase by PT PLN (Porsero) from Cooperatives of ather Business Entities. B, Geothermal 4} Law (UU) No. 27 year 2008 concorning Geothermal 2). Government Regulation (PP) No. 59 year 2007 jo. No. 70 year 2010 conceming Geothermal Operations. 3} MEWR Regulation (Pertien ESON) No. 11 year 2009 conceming Guideline for Geothermal Operations. 4) EMA Regulation [PerMlen ESDM) No. 22 year 2012 concerning Assignment to PT PLN (Persero) to purchase electicty trom {geothermal power plants and reference tani for power purchase by PT PLN (Perser) from geothermal power plans. , Publlc Private Partnership (PPP) 1) Presidential Regulation (Perpres) No. 672005 j. Perpres. No. 13/2010 j. Perpres No. 5612011 conceming Cooperation between Government and Business Enies in Infrastructure Provision 2) National Development Planning (Bappenas) Minister Reguaton(PerMlen) No. year 2012 conceming General Guidelines for Implementation of Pubic Private Partnership inthe Infrastructure Provision. 2IPP PROCUREMENT PROCESSES (BASED ON ELECTRICITY REGULATIONS) ND eee Cus "= Condhon(s; Renewable energies, mhe-mouth CFFP, local energy, excess power, expansbn project, energy criss De een ata Ulett eure) een Da a oa Ces ete ne ea Cn Us eisai eae == - =Dead TN LO ee a eC Re Pee tae ed Procurement Procedure: Raisins acta v nd Y ves == aia MJ = 4 e a Ye ¥ as ver Bee et ee ony peodions oct es Cre nos Cree reseed rm ‘Based on MEMR regulation, PP procurement process through an open tender with capacty >= 15 MW requires 821 days wih condition that EO en ee Cun aoe Le oIPP BUSINESS PROCESS FLOW. ancl Seng: Asses, Net Proft “echnical Svengh:exprence in PP development, EFC and © & mM fomiaton for de Proget Dessison eal Power Purchase reeent bemeton 6 Bade Proposal Resuiterents ‘Agree Major Tes & Corttans ‘ares Ete Tan and Base Fermua TY Perel ce orm ofthe Agroorrent Coal (25 yours), Hyto (0 years), Seotesal sa yes), Gas 20 years Project Seneme: BOO o: BOT Tat and Payers Fore Maas natural and potcal Svarerent Guararee if aptcabe) Ternaton (ter Fignts and Options of he Parties Sponsor’ Agreement ase of EP Coact pokes of nuance ee ye Pk ‘oa upy pl Facing Agrees; Foreign Investment Approval ‘The Legal Opin issued for PL “he Logal Opin sued for SELLER, ‘copy of cocurents) roving ga ight © use ane conor the Sto Peformance Secuiy Sige I Net Depend Capaciy test procedrescongtted eet g ERETYPICAL BUSINESS SCHEME OF AN IPP PROJECT Equity Shareholders Agreement Financial cies —> Seed —), een Senior Debt mS loem S ¢ s = contract as eontact, g ea earFrequently Asked Questions Q What are the general requirements to partlpate In PP procurementtender? [NONNTENNNA Tre applicant shall have capabilties in developing an IPP project, which is proven by ils financial stength and experiences in develop and operate an IPP project. Where do we find an info regarding IPP procurement plan? ts PLN announcing publ when the procurement is about to started? (STEEN Please refer to the Roncana Usaha Ponyodiaan Tonaga Listik (RUPTL) /PLN's Eectricty Provision Business Plan ‘or the IPP project procurement plan. PLN. wil announce a procurement of an IP project through national and local newspapers hen it comes. Q How to apply for a dect appoltment? At what condition(s) an entty Is eligible fori [ENN Please refer tothe drect appointment procurement procedure as explained in this booklet. Nevertheless in many cases, a ect appointment for an IPP project in PLN \wilbe implemented when procurement through an Open Tender resus in only one (0) applicant (please refer to Open Tender procedure in this booklet) Q can we developtoukd @ power plant by our own Inlatve and wil PLN purchase the Power from It? [gm A company shat comply wit al regulations regerdng electety busness in indonesia, eluding owe lant (FP) development PLN wil ony purchase poner from an? hat comptes wth the rlted reguistions ang that has boon slanrad in UPTLQ What kind of Goverment Guarantee scheme for IPP avalable nowadays? [NNN There are two schemes available recently 1. Business Viblty Guarantee Lette fo be issued by Minster of Finance, subject to MoF appraisal, for the projects under Fast Track Program (which are listed in EMR Regulation) 2. Guarantee Agreement for the project under Public Prvate Partnership (PPP) scheme, Q Is Italowed for a forelgn company to particpate hn the IPP bkidhg without forming a consortlum? [SEUEEEEINA A consortium shall be formes to participate inthe IPP bidding, typically with 2 to 4 members. in each consortium. Moreover, ther isa Foreign Investment regulation that requires a minimum of 5% of share fo be borne by a domestic companypary in forming a foreign invested compary. 9Nd Required Consents/ Permits/ Licenses to be Obtained by IPP Developer (among others and if applicable) ‘The material Consents required to be in the rame ofthe SELLER and inthe name of Contractor in connection withthe Project are 1. Consents required to be in the name of SELLER: 1.1 Articles of Association (a) Legaization of the Deed of Establishment of the SELLER and, i appropriate, Approval or Notification Receipt of the Minister of Law and Human Rights to the notaral deed artcls of association ofthe SELLER. (b) Registration of the approved notarial deed of establishment with the company register in the Department of Trade pursuant to Law No. 40 of 2007 dated 1 August 2007 on Limited Liabilty Companies and Law No. 3 of 1982 dated 1 February 1982 on Mandatory Company Registration (Wajib Daftar Perusahaan). 1.2. BKPM (a) Foreign Investment License under the Capital Investment Law, Law No. 25 of 2007 in the form of investment approval registration (persetyiuan pendaftaran)andior the “inprncile”Iicense (izin prinsp) (as applicable), as amended trom time to time, on terms consistent with the materal provisions of the Agreement. (b) Work permits for foreign personnel employed by SELLER Issued by the Chamman of the BKM or the Minsty of Manpower and Transmigration, based on approved Foreign Manpower Ulilzation Plan (Rencana Penggunaan Tenaga era Asing) (6) Principe Permit issued by the Chairman of the BKPM of MasterList of imported capital goods and issuance of decision (on tax facies for such capital goods based on Minister of nance Regulation No. 154/PMK.011/2008, as amended. (@) Issuance by the Chairman of 8XPM the Produce: Importer Identitcation Number (Angka Pengenal Importr Produsen ~ {APP importation of goods for Project during operational period. 1.3 Offshore Loans {a} Report to Bark indonesia on Offshore Loan Reporting Obligation, as regulated under Regulation of Bank Indonesia No.12,24/PBU2010 dated 29 December 2010 (as. amended) on Offshore Loans Reporting Obligations, Regulation of Bank indonesia No. 12/1/P8\2010 dated 28 January 2010 on Offshore Loans of Non-Bank Companies, and. Circular Letter of Bank Indonesia No. 13/uDInt of 2011 dated 20 January 2011 on Oifshore Loans Reporting Obligations. (b) Repor to the Department of Finance in accordance with Presidential Decree No, 59 af 1972 dated October 12, 1972 and Minister of Finance Decree No. 251MKIVIS/1073 dated May 3, 1973, including any related Laws. 0(6) Approval rom and report to PKLN Team established under Presidential Decree No. 39 of 1901 dated September 4, 1991 including any related Laws. (4) Report to Bank Indonesla on the withdrawal of offshore loans, based on Regulation of Bank Indonesia. No. 18/22P812011 dated 30 September 20:1 regarding Reporting Obligation of Ofshore Loan Withdrawal 1.4 Tax (a) Issuance of SELLER's of taxpayer identiication number (Nomor Pokok Wajib Pajak - NPWP) by the Department ‘of Finance, Drectorale General of Taxation. (b) Consent of Department of Finance, Directorate General of Taxation to Centralzaton of income tax and value added tax ‘administration In elovant Jakarta Tax Offic. 1.5 Minister (a) Issuance by Director General of Electcty and Energy Uuizaton of commissioning certificate for te Plant folowing ‘commissioning tests (Operational Faasbilty Certificate). (b) Permits ror the Ministry of Energy and Mineral Resources or the Ministry of Manpower and Transmigration to operate certain equipment and tools. (c) Issuance of an Electicty Supply Business License (in Usaha Penyediaan Tenaga Listrk or WPTL) following ‘commissioning of Pant, (d) issuance of a Customs and Excise Identity Number (NIK) by the Director General of Customs and Excise ofthe Deparment of Finance, 1.6 Local Government Authority (a) Recommendation of AMDAL or UKLIUPL from local government. (b) Issuance of Building Permit (zin Mendirikan Bangunan - NB). (c) issuance to SELLER of Permit under Nuisance Act, if required, (4) Pormit rom the Regent to SELLER to utlize iver water andlor surface water for purposes of Project, t applicable. (e) Permit rom local Bapedal for SELLER to posses, transport and store hazardous wastes, if applicable, (f) Permit rom the local Regent for discharge by SELLER of waste water into the ver, f applicable, (g) Pormit from the Local BAPEDAL for SELLER to posses, slore and utlze hazardous substances, if applicable.2 2. Consents required to be in the name of Contractor: {a) License from Minster of Pubic Works to forelgn Contractor to undertake the constructon of the Project through a. joint ‘operation pursuant to Regulation ofthe Minister of Public Works Decree No.oS/PATIN2011 dated 2— March 2011 on Guidelines on the Requirements to Grant Representative Licenses to Foreign Constructon Service Companies. (b) Issuance of income taxpayer registration number (Nomor Pokok Waib Pajak - NPWP) from Department of Finance, Directorate General of Taxation for each Contractor (6) Issuance of Taxable Entrepreneur Confirmation Number (NPPKP) from Department of Finance, Directorate General of Taxation. (@) Issuance by Governor of West Java and local authors of local constuction Heenses requied for the Contractor to engage in the construction of the Project. (e) Permits from the Ministry of Manpower and Transmigration or the Ministry of Energy and Mineral Resources to operate certain equipment and tats. (f) National Construction Services Business License IWKN required for the National Contractor to engage in the Construction ofthe Project. (0) Work permits fo foreign personnel emplyed by Contractor issued by the Ministry of Manpower and Transmigration during construction and commissioning of the Part. (hy Permit rom Depariment of Finance, Directorate General of Customs and Excise for temporary import of equipment and other materials to be utlizec In connection witn the constuction of the Project.Ceo) eee case aed pa ea cecaeed