2003

Conclusion of a Memorandum on the Joint Development and Construction of Geothermal Power Plants in Indonesia in Cooperation with Indonesian and Philippine State-Owned Oil Companies

Dec. 17. 2003
Marubeni Corporation

Conclusion of a Memorandum on the Joint Development and Construction of Geothermal Power Plants in Indonesia in Cooperation with Indonesian and Philippine State-Owned Oil Companies

On December 17, 2003, this Company concluded a three-company memorandum with an Indonesian state-owned oil company (PT PERTAMINA (PERSERO), hereafter referred to as "PERTAMINA") and a Philippine oil and energy development company PNOC-Energy Development Corporation, hereafter referred to as "PNOC-EDC") agreeing to jointly carry out development relating to geothermal power generation and construct geothermal power plants in three locations in Indonesia. The three chosen locations are Lumutbalai (330MW), Ulubelu(110MW) in the south of the Sumatra region and Tompaso(60MW)to the north of the Sulawesi region.

The conclusion of this memorandum is the result of the policies and directions of all three companies being in line with one another. PERTAMINA is hoping to accelerate the process of developing and constructing geothermal power plants in Indonesia, PNOC-EDC is hoping to expand its geothermal business overseas and our Company hopes to strengthen the plant supply and development of geothermal power plants in Indonesia.

Going forward, all three companies will work together on matters such as carrying out feasibility studies, arranging necessary financing and producing specification designs for geothermal wells and power generation facilities.

This Company has achieved a great deal in terms of supply and construction of power generation facilities for Indonesia, including combined cycle power plants in both Tanjung Priok (1,320MW) and Muara Tawar (1,095MW) and coal-fired power plant - boilers numbers 1 to 7 in Suralaya (3,400MW), and has strived to improve the system for the Indonesian power generation market, which is in the process of recovery. We already deal with the entire process from the development of geothermal power generation projects to the operation and maintenance of the power plants themselves in the Philippines. We also own independent power generation entities in two locations in the Philippines and a specialist operation and maintenance company that manages these entities.

Both the Philippines and Indonesia are leading countries in terms of geothermal resources; the Philippines has the second largest geothermal power plant capacity in the world after America, and Indonesia the fourth largest. It is also said that Indonesia has a latent geothermal generation capacity of approximately 20,000MW (2,000MW confirmed, 18,000MW latent) and the Indonesian government have adopted a policy of promoting increased geothermal generation capacity in the future by revising geothermal laws. We are in the process of looking towards providing support for south-south cooperation in both the Philippines and Indonesia and plan to promote power generation projects that make use of environmentally-friendly natural energy such as geothermal power generation on a worldwide scale. Making the most of our achievements in terms of constructing large-scale power plants in Indonesia and our experience with geothermal power generation projects in the Philippines and also studying an application for Clean Development Mechanism (CDM), we plan to focus our efforts on promoting the development and construction of geothermal power generation projects in Indonesia and other countries in the Pacific rim area in the future.

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