RI to invest $18b in power industry

RI to invest $18b in power industry

SINGAPORE (Dow Jones):Indonesia plans to invest US$18 billion in its power sector to meet increasing domestic demand in the next 10 years, Endro Utomo Notodisuryo, Commissioner of state- owned power company, Perusahaan Listrik Negara, or PLN, told Dow Jones Newswires Monday.

The proposed US$18 billion investment is based on assumptions of a steady annual 4 percent growth in gross domestic product for four years up to 2004, 8 percent GDP growth rate for the subsequent years into 2010, and an annual 9 percent increase for the next 10 years in power consumption.

Notodisuryo was speaking in Singapore after a presentation on the implementation of Indonesia's power sector restructuring policy.

The 10-year investment plan will concentrate on power generation and transmissions projects, Notodisuryo said. Indonesia is keen to form partnerships with foreign investors as it aims toward increased competition in the power sector to reduce the burden of PLN that is heavily in debt.

While new regulations allow "new investments by foreign companies to own up to 95 percent of total shares in generation plants," PLN reserves the "first right-of-refusal" in transmission and distribution investments, Notodisuryo said.

However, Indonesia's power reform, Notodisuryo said, is caught in a dilemma due to the current political instability. Proposed policies are pending approvals by government and parliament.

"The (Indonesian) government is facing so many problems and has to respond to so many issues right now," Notodisuryo said.

Notodisuryo is also inspector-general for electricity and energy development in Indonesia's ministry of mines and energy. He was previously director-general at the ministry.