CalEnergy asks to go on with geothermal projects<\/p>\n
JAKARTA (JP): The United States-based CalEnergy Company Inc.
\nis optimistic that the government will allow it to continue its
\ngeothermal power projects in Patuha, West Java and Bedugul, Bali.<\/p>\n
The president and chief operating officer of CalEnergy Asia,
\nDonald M. O'Shei Jr, told The Jakarta Post last week the company
\nhad asked the government to allow it to continue the projects,
\nwhich have been on hold as part of the government's retrenchment
\npolicy to cope with the currency crisis.<\/p>\n
He said that he was optimistic that the government would
\nfulfill the request because the projects were beneficial, needed
\nby the public and had a strong legal basis to be continued.<\/p>\n
\"There are many good reasons to be optimistic that all
\ngeothermal power projects, including ours, will be allowed to
\ncontinue,\" O'Shei said.<\/p>\n
The power projects which CalEnergy has asked to continue
\ninclude three power units at the Patuha power plant -- Patuha 2,
\n3 and 4, -- which have a combined capacity of 240 megawatts; and
\nfour power units at the Bedugul power plant -- Bedugul 1, 2, 3
\nand 4 -- which have the combined capacity of 320 megawatts.<\/p>\n
The Patuha project is being codeveloped by CalEnergy and
\nIndonesia's Mahaka Energy, while CalEnergy's partner for the
\nBedugul project is Indonesia's PT Pandanwangi Sekartaji, a
\nsubsidiary of the Panutan group.<\/p>\n
President Soeharto, in a decree issued on Sept. 20, postponed
\nand put under review some US$37 billion worth in infrastructure
\nprojects financed by foreign loans to cope with the rupiah's
\nsharp depreciation against the U.S. dollar.<\/p>\n
The decree postponed Patuha units 2, 3 and 4 and Bedugul units
\n3 and 4, and put under review Patuha Unit 1 and Bedugul units 1
\nand 2.<\/p>\n
However, the decree gave the go-ahead to CalEnergy's 400-
\nmegawatt geothermal power project in Dieng, Central Java.<\/p>\n
CalEnergy is developing the Dieng project with its Indonesian
\npartner PT Himpurna Enersindo Abadi, a company formed by the
\nretired military association Himpurna.<\/p>\n
The President issued another decree on Nov. 1 which allowed
\nfor the continuance of 15 major projects previously reviewed and
\npostponed, including the 80-megawatt Patuha 1 power unit.<\/p>\n
O'Shei believed the government would issue more decrees in the
\nnear future to allow other projects to continue and he was
\noptimistic over CalEnergy's prospects for its geothermal projects
\nin Patuha and Bedugul to be included in such decrees.<\/p>\n
He said one reason for the optimism was the fact that unlike
\ncoal and gas-fired power plants, contracts for geothermal power
\nprojects provided no legal allowances for delays.<\/p>\n
\"Geothermal power projects can't be postponed. There is no
\nlegal mechanism for that under the contracts,\" he said.<\/p>\n
Another reason is that geothermal power projects are more
\nenvironmentally sound than power plants using fossil fuels, such
\nas coal and gas, he said.<\/p>\n
From the macroeconomic point of view, the development of
\ngeothermal power plants are good for Indonesia's balance of
\npayments as they could reduce the domestic use of coal, oil or
\ngas for power generation so that excess fossil fuels could be
\nexported to create more revenue in dollars, he said.<\/p>\n
\"We see that the government has been increasingly aware of the
\nbenefits of geothermal power projects and it looks like it will
\nshow more favor to them,\" O'Shei said.<\/p>\n
With regards to the Bedugul project, O'Shei said, Bali very
\nmuch needed the project due to potential power distribution
\nproblems from Java to the island.<\/p>\n
He said the state-owned electricity company PLN supplies power
\nfrom Java to Bali through undersea cables which are prone to
\nfailure due to ocean currents.<\/p>\n
\"If that (failure in power distribution) happens, Bali will
\nnot have enough power,\" he said.<\/p>\n
O'Shei said CalEnergy had thus far invested $192 million for
\nthe Dieng project, $83 million for the Patuha project, and $20
\nmillion for the Bedugul project.<\/p>\n
He said the Patuha 1 unit was now under construction and could
\ncome on line in 1999, while the construction of the Patuha 2 unit
\ncould be commenced late this year and the Bedugul project in the
\nmiddle of 1998.<\/p>\n
O'Shei said the financial closing for all of CalEnergy's
\nprojects in Indonesia had been concluded with Credit Suisse First
\nBoston as the lead arranger for two syndicated loans worth $560
\nmillion. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/calenergy-asks-to-go-on-with-geothermal-projects-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}