PLN to tender 8 power projects

PLN to tender 8 power projects

Leony Aurora, The Jakarta Post, Jakarta

State power company PT Perusahaan Listrik Negara (PLN) is set to
tender out eight power generation projects worth US$3.67 billion
later this year to boost the country's power capacity by almost
15 percent.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said the winners would be announced within six months after the
opening of tenders to ensure an extra 3,670 megawatts (MW) of
electricity on the country's network.

"Although the (projects) are scheduled for the next five to
seven years, we want to start tendering right away," said Purnomo
at a ceremony where the regulatory framework supporting the
tender process was announced.

The plants include four in densely-populated Java, with
capacities of between 500 MW and 1,200 MW each, while other
smaller-capacity plants will go to Bali, North Sumatra, North
Sulawesi and East Kalimantan.

Purnomo said investors from Malaysia, the U.S., Japan, and
India had shown interest in the power sector here.

Indonesia currently has some 25,218 MW of installed capacity,
which has to meet demand that rises by between 6 percent and 7
percent annually.

The country will need to invest $30 billion to keep up with
demand during the next decade, however, the cash-strapped
government and PLN can only provide a third of the required
investment and will look to the private sector for the rest.

PLN president director Eddie Widiono said the tenders would be
opened this year in three stages, with the coal-fired Cirebon
plant being the first.

"Pasuruan and Central Java will be tendered in the second
stage, while Paiton 3 and 4 will go in the third," he said. "The
plants outside Java will be tendered all together, either in the
second or third stage."

Eddie said he hoped the new power producers would be able to
sell their output in rupiah, not in U.S. dollars as they do
currently. "It would be easier for us, as our income is also in
rupiah," Eddie said.

Independent producer PT Power Jawa Barat has already agreed to
sell power at Rp 450 (about 4 U.S. cents) per kilowatt/hour (kWh)
to PLN. The power producer is expected to start operating a 600-
MW coal-fired plant in Serang, Banten, in 2008.

PLN's basic energy selling price is presently pegged at 7
cents per kWh.

The company is trying to make use of cheaper gas and coal to
generate power to cut back on high costs for oil-fired plants.
Although oil plants contribute only 30 percent of the country's
total power capacity, they make up close to 70 percent of the
nation's total generation costs.