FINANCING STRATEGY FOR ENHANCE BUSINESS VALUE OF CIKANCANA MINI HYDRO POWER PLANT PROJECT

Abstract

PT Cahaya Kancana Nusantara has plan to develop the mini hydro power plant with 4.7 MW capacity to distribute electricity in Cikancana village, Cianjur. The development of mini hydro power plant has purposed to bring electricity equality in Cianjur by using renewable energy sources. The objectives of the research is to know the financial feasibility of the project, the most sensitive factors to mini hydro power plant, and the most suitable financing strategies to enhance the business value of  the company. The analysis started by analyzed internal and external factors of the business and used the data to generated cashflow from the project. NPV, IRR, and PBP are used to become indicator in financial feasibility of the project and choose the most suitable financing strategies by compare these indicators. The research show that Cikancana mini hydro power plant project are financially feasible to build in 2019. The most sensitive factors is capacity factor, long-term debt interest rate, and electricity tariff. To finance this project, the company can used international bank loans to make the project become more profitable and give higher return to equity shareholder and become more attractive to investors.Keywords: Financing Schemes, Mini Hydro Power Plant, Renewable Energy, Project Financial Feasibility, Project Financin