PLN agrees with Japan on loan for plant buyout
PLN agrees with Japan on loan for plant buyout
By Johannese Simbolon
NUSA DUA, Bali (JP): State-owned electricity company PT PLN
said on Thursday it had reached a preliminary agreement with the
Japanese government over a US$1.15 billion soft loan that would
be used by the company to buy out the Tanjung Jati B power plant
in Jepara, Central Java.
"We have reached a preliminary agreement. We expect the
Japanese government to make a final decision on the loan next
month," PLN president Adhi Satriya told reporters on the
sidelines of the Indonesian International Oil and Gas Exhibition
and Conference here.
He said under the agreement, Indonesia would receive the 40-
year loan with a grace period of 10 years and an interest rate of
1 percent per year.
The 1,320 Megawatt power plant is owned by PT HI Tubanan
Power, a joint venture between Hopewell of Hong Kong and local
company PT Impa Energy. Impa is owned by businessman Djan Farid,
who is linked with former president Soeharto's daughter Siti
Hardiyanti Rukmana.
PLN has gained support from the House of Representatives for
its plan to buy out the plant but drew protests from some
legislators and public leaders.
Former PLN president Djiteng Marsudi has called on PLN to
cancel the plan, saying it would be better for the company to use
the loan to provide more power to people in rural areas.
Djiteng also said PLN did not need to buy the power plant,
given the power oversupply in the country amid the economic
crisis.
But Adhi defended the plan, saying the buyout would enable PLN
to cut the power price from the power plant from 6.4 US cents per
kilowatt hour to 2.3 cents.
PLN is holding negotiations with 27 independent power
producers (IPPs) to cut the prices of their power supply.
PLN, which sells power in rupiah and buys power from IPPs in
dollars, has been gravely affected by the sharp depreciation of
the rupiah to the dollar since mid-1997.
Medco
Meanwhile, national oil and gas company PT Medco Energy
Corporation called on PLN on Thursday to pay $11 million in
arrears for the natural gas supply to the state-owned company's
Tanjung Batu power plant in Kutai, East Kalimantan.
Medco president John S. Karamoy said PLN had not paid the
power plant for its gas supply from the Sanga-Sanga gas field in
East Kalimantan for the past 14 months.
The 60 Megawatt power plant is the main supplier of power to
East Kalimantan.
He warned that Medco would stop supplying natural gas to the
power plant if PLN still refused to pay for the gas supply in two
months.
"If PLN does not make any payment in two months, we won't have
any alternative but to stop the gas supply.
"We will be in financial difficulty if we continue gas
production at the field and supply it to the power plant,"
Karamoy said.
He said PLN would be forced to stop supplying power to more
than 50 percent of its customers in the towns of Samarinda and
Balikpapan if Medco stopped its supply.
Medco earlier threatened to stop the gas supply last Aug.18
but it revoked the threat after the Minister of Mines and Energy
stepped in to settle the dispute.
Medco agreed to reduce the price of its gas supply to Rp
15,000 (about $2) per million British thermal unit (MMBTU) from
$3.
Yet Medco did not receive any payment from PLN, Karamoy said.
"Our case is ironic in view of PLN's efforts to get a loan
from Japan to buy out the Tanjung Jati B power plant," Karamoy
said.
When asked for comments on Medco's complaints, Adhi said he
did not know the details of the case.
"You know that PLN has a lot of debts," he said.