Singapore Global Project, Energy and Infrastructure Finance partner James Murray participated as a panelist at the 25th edition of Project Finance International’s (PFI) “Financing Energy Projects in Asia” conference held virtually on October 15th. The region’s most senior project finance experts across banking, law and financial advisory discussed the latest trends, developments and challenges pertinent to project financing, renewables and frontier markets, with particular focus on Indonesia and Vietnam – two of the most important markets for Southeast Asia’s project development activity.
On the Indonesia Panel, Mr. Murray and his co-panelists explored themes including Indonesia’s power sector growth, key infrastructure success stories, the role of multilaterals, challenges and opportunities for investors in infrastructure asset recycling and the implementation of new financing structures.
Mr. Murray, who has had a leading role advising on Indonesian IPPs over the past two decades, including on most of the major geothermal IPPs in the country to have been project financed, noted that Indonesia’s geothermal sector has historically attracted strong support from sponsors, ECAs, multi-laterals and commercial banks. While these projects can have their challenges given steam field resource risk and other factors, development in the sector is continuing and they often present compelling investment opportunities.
He also noted that with the Indonesian Parliament’s proposed renewable energy law and attempts to pivot the economy towards more renewables, Indonesia could be headed towards a more sustainable future, with the key to further success being the way in which these laws are finalized and implemented.
Indonesia has one of the top geothermal resources in the world, and with increased demand for electricity and global emphasis on reduction of carbon emissions, Indonesia’s renewable power sector continues to be an important area of focus for offshore investors. Milbank’s experience in the Indonesian power sector spans the full array of sectors, including conventional thermal-power, geothermal, hydro (storage and run-of-river) and wind. Milbank has been at the cutting edge of developing new contractual structures and risk allocations in the country, and helping parties to navigate various legal and regulatory changes over the years. Continuing this trend in leading the market, most recently Mr. Murray and his team have been working on the financing of a major IPP which is expected to be the first to close under the new 51%:49% PLN ownership structure developed under the framework of Presidential Regulation No. 6 of 2016.
