PLN to get $93.5m from China for power plant
Leony Aurora , The Jakarta Post, Jakarta
State power firm PT Perusahaan Listrik Negara will get US$93.5 million in loans from China to build a coal-fired power plant in West Kalimantan, a company executive says.
The loan agreement was concluded during President Susilo Bambang Yudhoyono's recent visit to China, PLN's director of power plants and primary energy generation, Ali Herman Ibrahim, said on Monday.
The loan would allow the construction of a power plant with a total capacity of 110 megawatts (MW) -- comprising two units of 55 MW each -- in Parit Baru in West Kalimantan, he said on the sidelines of an energy seminar.
"We have not signed the official agreement yet, so we don't know yet the tenure and loan terms," said Ali.
"Usually we get 30 years (for maturity) and a four-year grace period," he added.
During the visit, Indonesia and China also signed the heads of an agreement to build a 2,400 MW power plant, comprising four units with a capacity of 600 MW each, in Bangko Tengah in the coal-rich province of South Sumatra.
"The electricity will be sent to Java as Sumatra's network cannot sustain such a large amount of power," said PLN's president director Eddie Widiono.
The mine-head plant will be majority owned by China Hua Dian Corpoation, with a 55 percent stake. Local companies PLN, coal producer PT Tambang Batubara Batu Asam, and PT Indika Inti Energi will own the other 45 percent, said Eddie.
It is estimated that the project will cost $2.1 billion, with financing coming from the China Exim Bank and China Development Bank.
"The electricity will be sold at 3.5 U.S. cents per kilowatt hour," said Eddie.
To provide additional supply to South Sumatra, PLN would also build three other mine-head power plants with a capacity of 100 MW each, he added.
"We expect them to start operating in 2008 or 2009," said Eddie.
Stalled development of power generating capacity since the economic crisis hit in 1997, and steadily increasing demand amid an improving economy have resulted in a critical situation, with generating capacity barely keeping pace with demand.
PLN has estimated that power demand in the network serving densely populated Java and Bali islands at peak time could reach 15,245 MW in October, leaving excess supply at only 120 MW as power supply declines due to the dry season.
Although the Java-Bali network has installed capacity of 19,615 MW, real capacity hovers at around 15,500 MW, while minimum reserve capacity should be at least 1,290 MW.
Three power plants in Java, with a combined capacity of nearly 2,000 MW, are expected to come on stream between the end of this year and the first quarter of 2006.