PLN seeks funds to revamp power plants outside Java and Bali

SURABAYA, East Java (JP): State-owned electricity company PT PLN is currently seeking foreign financial support for its plan to rehabilitate power plants outside Java and Bali, an executive at the Ministry of Mines and Energy said.

Director General of Electricity and Power Development Endro Utomo said on Monday at least 20 regions, particularly in Sulawesi, Kalimantan and Irian Jaya, faced electricity shortages due to the limited networks and aging power plants in their areas.

"At least Rp 22 billion (US$2.9 million) is needed for the rehabilitation of the power plants," he said during a break in a ceremony marking the completion of gas-fired power plant Gresik Unit I in Gresik, East Java.

Rehabilitating aging power plants is a must for PLN in order to meet the future demand for electricity, which is expected to grow at an average rate of 15 percent a year, he said.

He said some of the funds for the project would come from PLN's income, which would increase next month as the result of the government's decision to raise electricity rates.

The government obtained the House of Representatives' approval last month to raise electricity rates by an average of 29.43 percent starting on April 1.

Endro said the remaining funds would come from loans from foreign financial institutions.

He said the government was currently negotiating with potential creditors.

"We hope to be able to obtain grants or loans from the Japanese Overseas Economic Cooperation Fund (OECF), just like we got for the rehabilitation of the Gresik Unit I power plant," he said.

The OECF gave the government of Indonesia a grant of $20 million to rehabilitate power plants at Gresik Unit I and II.

A representative from the Japanese Embassy, Koji Hachiyama, said the Japanese government had a great interest in the development of power plants in Indonesia.

"We are going to study the possibility of participating in other projects dealing with electric power here," he said. (nur/cst)