Astra to build 130 MW power plant

JAKARTA (JP): PT Astra International, Indonesia's largest automobile producer, will become the 18th private power generator in the country under a build-operate-transfer scheme for the state-owned electricity company PT PLN.

An Astra International subsidiary, PT Asrigita Prasarana, will invest US$150 million to build a 130 megawatt (MW) power plant in Palembang, South Sumatra.

"We'll start construction soon. The combined-cycle power plant will begin operating in November 1998," PT Asrigita's managing director Arief Istanto said after a power-purchase agreement with PLN was signed yesterday.

Under the agreement, PLN will buy electricity from Asrigita for US$0.064 per kilowatt-hour.

Arief said that 20 percent of the combined-cycle power plant would be constructed with local materials, and that the plant would burn gas from the Asamera field in South Sumatra.

He said 75 percent of the $150 million investment would be funded by loans and 25 percent by the company's capital.

He said PT Asrigita, which is 87 percent owned by Astra and 13 percent by Martini Sulaeman, would build the power project under a 20-year build, operate and transfer scheme.

PLN president Djiteng Marsoedi said his company had signed 18 power-purchase agreements with private power generating companies, including Asrigita.

He said five of the 18 power projects used coal, two used gas and 11 used geothermal power. The projects include the Paiton plants, Tanjung Jati B and Darajat in Java, Sibolga in North Sumatra and Amurang in Sulawesi.

The Ministry of Mines and Energy's director general of electricity and new energy development, Zuhal, said: "We have been urging PLN to buy the electricity by considering market risks."

He said the government was working on a new legal framework to buy electricity from the private sector.

"We'll regulate that PLN and the private sector must share market risks in selling electricity. It's not fair just to leave the market risk with the state-owned company," he said.

He said the government would expose the electricity business to more competition by reducing the so-called unsolicited projects and awarding more contracts under solicited project schemes.

For unsolicited projects, private companies can propose to build a power plant and get a contract without going through a PLN tendering process. Whereas, solicited projects require private companies to compete in a tender organized by PLN. (bnt)

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