Marubeni Corporation (hereinafter, “Marubeni”) is pleased to announce that a Framework Agreement (hereinafter, “Agreement”) has been signed on December 3, 2023 by PT. Cirebon Electric Power (hereinafter, “CEP”), the company operating the Cirebon 1 Coal-Fired Power Plant in the Republic of Indonesia (hereinafter, “Indonesia”) in which Marubeni has a 32.5% investment share, the Asian Development Bank (hereinafter, “ADB”), the Indonesia Investment Authority (hereinafter, “INA”), and PT. PLN (Persero) (hereinafter, “PLN”), on mutual cooperation towards the reduction of the operational term of the Cirebon 1 Coal-Fired Power Plant (“Cirebon 1 Project”) through the application of an Energy Transition Mechanism (ETM) led by ADB. This agreement is intended to confirm the framework of the early retirement mechanism through an ETM with the aim to close the transaction by the first half of 2024, based on the spirit of the Memorandum of Understanding* executed among the parties on November 14, 2022.

On December 3, 2023, the signing ceremony of the Agreement took place in a side event at the United Nations Climate Change Conference (“COP28”) currently being held in Dubai, the United Arab Emirates. The parties confirmed to proceed with contractual framework discussions aiming to reduce the term of the Cirebon 1 Project and greenhouse gas emissions from the plant through the utilization of an ETM.

This ETM is an innovative finance approach led by ADB to support the transition from coal-fired generation to clean energy and the Japanese government has announced the provision of a grant for this purpose. In the case where the four parties come to an agreement on certain conditions, such as the financing terms and conditions and measures to mitigate the potential impact due to the early retirement of the plant (such as the arrangement of an alternative power source), the Cirebon 1 Project is expected to be the pilot project to aim for the early retirement of the coal-fired power plant by applying this ETM.

Through the promotion of decarbonization of its existing coal-fired power plants, Marubeni will drive the decarbonization process of its corporate group forward, enhance its green strategy, and is committed to promoting decarbonization in Indonesia.

* News Release, November 14, 2022:
Efforts towards Reducing Greenhouse Gas Emissions in a Coal-Fired Power Plant in Indonesia: Joint Study on Potential Reductions in the Plant’s Operational Term through the Utilization of an Energy Transition Mechanism
https://www.marubeni.com/en/news/2022/release/00089.html

 

Overview of the Cirebon 1 Coal-Fired Power Plant:

Site:	Cirebon, West Java, Republic of Indonesia *approximately 250 km to the east of Jakarta
Generating Capacity:	660 MW (net)
Commercial Operation Date:	July 2012
Offtaker:	PT. PLN (Persero)
Contract Period:	30 years