KUALA LUMPUR ~ Malaysian investment bank Affin is to raise US$308 million in financing for the construction of two geothermal power plants in Java.

The power plants would be located in Deing province in central Java and in Patuha province in western Java, the bank said in a statement this week.

The plants would be built by Indonesian company PT BumiGas Energi (BGE), which will operate them for 15 years before handing them over to a company jointly owned by state oil firm Pertamina and state electricity provider PT PLN.

“The construction will take approximately four years on an estimated cost of $400 million,” BGE’s chairman H.M. Wijaja said in the statement.

The proposed fund-raising exercise would take place through the issuing of bonds worth $308 million.

“We hope to finalize the fund-raising exercise by year-end 2006,” said the president and chief executive of Affin Investment Bank, Sheikh Awab Sheikh Abod.

“Being a government-linked project, it will further enhance Malaysia-Indonesia trade links,” he said.

“This is our first cross-border deal in Indonesia, and we are confident that we will be awarded a few more projects here once we have completed this exercise.”