Indonesian Political, Business & Finance News

N. Sumatra to go ahead with hydroelectric power project

| Source: JP

N. Sumatra to go ahead with hydroelectric power project

Apriadi Gunawan, The Jakarta Post, Medan

North Sumatra Governor T. Rizal Nurdin asserted on Saturday that
the provincial administration would go ahead with the
hydroelectric power plant (PLTA) project in Lau Renun, Dairi
regency, despite the decreasing water supply to the plant.

"We have decided to go ahead with the project that has
absorbed a huge amount of money because the province is facing
power shortages due to the rapid growth of factories and new
settlement areas in the province," the governor said.

The water supply from Lau Renun river to the plant has dropped
drastically due to illegal logging in the rain forest in the
regency.

The PLTA Lau Renun project, which is still in progress, is
being built with a 25.6 billion yen soft loan from Japan Bank
International Corporation (JBIC). The project started in 1995 and
is scheduled to be completed in 2004.

Rizal acknowledged that there was something amiss in the
project's feasibility study, hence the drop in the river water
level had not been detected earlier.

Local experts predict that North Sumatra will face a serious
power crisis in the next three years if no power plants are built
this year.

The existing power plants currently have a capacity to supply
1,250 megawatts of electricity but in the next three years the
demand for power is forecast to rise by between 10 percent and 20
percent.

Marojahan, spokesman for the local office of state electricity
company PT PLN said that ideally the province should have more
than 2,000 megawatts in reserve, instead of the current 400
megawatts.

"In anticipation of a possible power shortage, PLN decided to
build the hydroelectric power plant and another one in
Sipansihaporas in the regency, with a total capacity of 200
megawatts.

Meanwhile, Minister of Energy and Mineral Resources Purnomo
Yusgiantoro said on the sidelines of his visit to the Gas and
Coal-fired Power Plant (PLTGU) in Sicanang, Belawan, some 30
kilometers north of the city on Friday, that the government was
still negotiating with some investors to build another three
power plants in the province.

The PLTGU currently under construction in Sibolga regency is
projected to have a capacity of 200 megawatts while Geothermal
Power Plant (PLTPB) Sarulla, also under construction, will have
300 megawatts, and PLTA Asahan I and II 586 megawatts.

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