Indonesian gas power plant developer gets new funding

The DFIs involved are International Finance Corporation (IFC), Asian Development Bank and Germany's DEG. Sumitomo Mitsui Banking Corporation is also participating. The new funding will be used to support capital expenditure as Maxpower ramps up its Indonesia exposure.

Maxpower Group was until recently known as Navigat Energy. It started out as an equipment business and remains the second-largest global distributor of General Electric Jenbacher engines, having sold more than 1,000 MW of units through distribution licenses in Indonesia, Singapore and Thailand.

The Maxpower business - now the largest revenue driver - was established in response to demand not only for equipment but also skilled operators who could develop, own and operate power generation facilities.

Maxpower is targeting 1,000 megawatts of installed operating capacity by 2016. The company currently has more than 300 MW of installed capacity in Indonesia and Myanmar, as well as operations in Singapore and Thailand. It typically pursues projects of 2-100 MW in size.

In May, Indonesia-focused PE firm Mahanusa Capital and Gunung Sewu Group invested $21 million in the company. The commitment followed a $25 million investment by Standard Chartered Private Equity (SCPE) in December 2013, which came in conjunction with a $279 million debt refinancing. SCPE first backed Maxpower in January 2012, putting in $58 million.

"Delivering environmentally friendly and affordable electricity across the archipelago has been a constant challenge for the Indonesian government. In recent years independent producers have become instrumental in developing innovative power-generating solutions that suit the unusual topography of our country. Maxpower Indonesia is a well-established power developer renowned for its state-of-the-art modular power generation technology," Sukatmo Padmosukarso, president director of IFF, said in a statement.

Indonesia is a good fit for a distributed power provider. According to Perusahaan Listrik Negara (PLN), the country's state-owned power utility, electricity demand will rise from 187 million MW in 2013 to 354 million MW by 2021. While PLN will cover a large portion of additional demand, IPPs are expected to play a more significant role. They currently account for 17% of the 44,450 MW in total installed capacity; 108 IPPs representing a further 16,812 MW are under development.

The other consideration is the country's low electrification ratio, which stands at 77.9%, compared to 99.4% in Malaysia and 87.7% in Thailand. The ratio plummets beyond Java and Bali, falling below 50% in parts of West Papua.

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• Topics
• Expansion
• Industrials
• Southeast Asia
• Indonesia
• German Investment and Development (DEG)
• IFC
• Growth capital
• energy