Malaysia and RI to set up $7.5b power plant project
Malaysia and RI to set up $7.5b power plant project
KUALA LUMPUR (UPI): Malaysia and Indonesia will sign a joint venture agreement this weekend to build a US$7.5 billion coal- fired power plant, a company spokesman said yesterday.
Located in southern Sumatra, Indonesia, the plant will have an eventual generating capacity of 5,000 megawatts of electricity, Sikap Project Management Service's executive director Ravindra Nathan said.
He said the project, when implemented, will form part of the Association of Southeast Asian Nations' Super Grid which enables the cross-border transfer of power to meet the growing demand of Indonesia and Malaysia as well as Thailand, Singapore and the Philippines. Brunei is the other member of the six-nation grouping.
The signing of agreement between Sikap Ipp Transystem, the Malaysian consortium led by Spms, and Indonesian consortium Pt Bukit Asam will be witnessed by Prime Minister Mahathir Mohamad who will be in Jakarta on a two-day working visit starting Friday.
The bulk of the electricity of the massive project will be for consumption in Indonesia and for export to Malaysia, Ravindra said.
The $7.5 billion estimated cost of the project does not include the construction of transmission systems, he said. The cost of building overland transmission lines and submarine cable interconnections will amount to another $2 billion.
This will bring the total cost of the project to about $9.5 billion, making it the largest of its kind in Asean, he added.
Ravindra said the project, which will be undertaken in phases, will take about 15 to 20 years to complete. The first phase will involve the construction of a 500 megawatt unit on a 50-50 basis by Malaysia and Indonesia.
The "mine mouth" power generation project will make available to consumers cheaper power through cost savings associated with not having to transport the coal to the generating plant.
"Mine mouth" power generations means that the power station will be located near the mouth of the coal mine.
There are vast coal deposits in Indonesia. Known resources are estimated to be enough to last 50 years.