INCO secures US$300M for Karebbe hydropower

Nickel producer PT Inco Tbk has executed a senior export facility agreement for a loan facility in the amount of up to US$300 million with the Bank of Tokyo-Mitsubishi UFJ Ltd and Mizuho Corporate Bank to finance the hydro power project at the Larona River in the Karebbe area of South Sulawesi.

The export facility is supported by Nippon Export and Investment Insurance (NEXI). "In light of its improved financial performance and improved financial market conditions, the company decided not to execute the short-term revolving credit facility agreement with Vale International which was approved by shareholders in April 2009," Inco said in a statement Monday.

The Karebbe project will increase Indo's hydro power generation by 33%, adding 90 MW to the current capacity, and is expected to be completed in 2011. The project is part of the Inco's efforts to produce permanent downward shifts in cost structure, as it will replace high-cost thermal power generation in an energy intensive operation.

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