PLN seeks $30b in investment over 10 years
PLN seeks $30b in investment over 10 years
Dadan Wijaksana
The Jakarta Post
Jakarta
State-owned electricity firm PT Perusahaan Listrik Negara (PLN)
said on Tuesday it would need about US$30 billion in investment
over the next 10 years to increase its power generating capacity
by 20,000 megawatts (MW).
PLN president director Eddie Widiono said on the sidelines of
an international energy conference the company needed to increase
its capacity to meet rising domestic power consumption.
Eddie said of the total investment required, PLN would be able
to provide $9 billion to $10 billion and the government could
come up with an additional $4 billion.
"The rest will have to come from private investors. That is
why we are in serious need of foreign investors to help us build
these power plants," Eddie said.
According to estimates based on the National Electricity Plan,
the country will require an additional 23,443 MW of power by
2013, boosting the capacity of existing power plants to 54,528
MW.
This calculation is based on a number of assumptions,
including average annual economic growth of 5 percent and
population growth of 0.9 percent.
A lack of investment has been a major problem in the country's
crucial power sector.
Power shortages in the country have grown increasingly serious
over the past several years, as power demand has continued to
grow while supply has remained stagnant due to a lack of
investment.
PLN has said it will need to build at least 47 new power
plants and 14 high-voltage transmission lines over the next 10
years to keep up with electricity demand, which is expected to
surpass supply by 2005.
Most of the new power plants will be built in Java, Sumatra
and eastern Indonesia.
Andrew Steer, the World Bank's country director, told the
conference an enormous amount of financing was needed for the
country's power and energy sector, requiring the involvement of
the private sector.
Steer said that from 2004 to 2012, investment in the power
sector should reach $10 billion to $12 billion for power
generation, coupled with $4 billion to $7 billion in investment
for the construction of transmission and distribution facilities.
The World Bank has been actively involved in funding projects
in the sector, but private sector participation is required to
secure the amount of financing required for the sector.
Among the efforts being taken by the government to lure
investors is a plan to revoke PLN's right to a monopoly in the
power sector, which would pave the way for private power
companies to sell electricity directly to customers by 2008.
Experts have said the government must improve the investment
climate in the country by ensuring legal certainty, the sanctity
of contracts and security, and improving the implementation of
regional autonomy.