ADB may lend $140m to KL, RI

ADB may lend $140m to KL, RI

Grace Nirang, Bloomberg/Jakarta

The Asian Development Bank may lend US$140 million to Malaysia and Indonesia for the construction of electricity transmission grids linking the two countries, said an official of Indonesian state utility PT Perusahaan Listrik Negara.

The Manila-based bank wants to fund electricity grids linking Indonesia's Sumatra island with Peninsular Malaysia, and Indonesia's West Kalimantan province with Malaysia's Sarawak state, said Eddie Widiono, Perusahaan Listrik's president director. The loan agreement may be signed next month, he said.

"The Sumatra-Peninsular Malaysia grid will cost about $100 million, while the Kalimantan-Sarawak one needs about $40 million," Eddie told reporters in Gandul, a district south of Indonesia's capital Jakarta.

The two grids are part of a plan by Southeast Asian nations to link 14 electricity transmission grids in the region to reduce the need to build more power plants. The lines will allow the countries to tap power from each other as they have different periods of peak demand.

So far, only two of the 14 proposed transmission links have been built, linking Peninsular Malaysia with Singapore and Malaysia with Thailand.

Southeast Asian nations would save $2.5 billion from 2008 to 2020 by building the grid as it would allow sharing of power instead of building new plants, Eddie said.