Indonesia Power to build power plants

The Jakarta Post, Jakarta

Power firm PT Indonesia Power said it would build a number of small capacity power plants in Jambi province and East Kalimantan province next year to meet domestic power demand.

Firdaus Akmal, the company's president said it would build two power plants in Jambi province and one in Berau, East Kalimantan partnering with foreign investors.

"Two power plants will be built in Sarolangun Bangko and Muaro Bungo in Jambi and one in Berau, East Kalimantan," Firdaus told reporters on Tuesday as quoted by Antara.

Firdaus said each power plant would have a capacity of 2 x 7 Megawatts (MW) and the company would invest some US$14 million into the project. However, the company will also ask foreign investors to provide the financing. Indonesia Power is a subsidiary of state-owned power firm PT PLN, and operates power plants across Java and Bali.

"We still use our internal financial resources. But there are foreign investors from China and South Korea who are interested to participate in the project," he said.

Indonesia is facing the risk of a power crisis with demand growing by average of 7 percent annually but barely an increase in supply due to the absence of investment in the power sector for the past few years.

Indonesia's total installed capacity is around 22,000 MW with the Java and Bali regions consuming 80 percent or 18,661 MW of the capacity. The vast outer Java-Bali islands only receive some 20 percent or less than 4,000 MW.

Only 53 percent of the country has been electrified.

Firdaus added the company is also working on a project to build hydropower for Java and Bali island.

The company is preparing to build Raja Mandala hydropower plant which will be set up between Saguling dam and Cirata dam.

He said the hydropower plant would have a small power capacity of 60 MW.

"We are conducting a study and it would take one and a half year to complete. We expect to start construction in 2006," Firdaus said.

Indonesia Power currently manages and operate eight power plants across Java and Bali namely Priok, Suralaya, Saguling, Kamojang, Mrica, Semarang, Perak, Grati and Bali. The power plants have combined capacity of 7,318 MW. It makes up 48 percent of the total installed capacity for the Java-Bali system.