Six minihydro power plants to be developed

JAKARTA (JP): Three companies from Indonesia and the United States signed yesterday a joint venture agreement to develop six minihydro power plants in West Sumatra and North Sulawesi next year.

The consortium, called PT Andika Hidro Internusa, is 30 percent owned by PT Andika Energindo -- a company formed by the Education and Welfare Foundation of state-owned electricity company PLN --, 20 percent by Indonesia's PT Triputra Energi Internusa and 50 percent by U.S. giant power company El Paso Energy Hydro BV.

Andika Energindo president Moelyadi Oetji said the consortium would develop three minihydro power plants in West Sumatra and three others in North Sulawesi with a total capacity of 17.1 megawatts.

The three minihydro power plants in West Sumatra will be named the Karambil power plant (2.6 MW), the Muara Sako power plant (4.2 MW) and the Letter-W power plant (7.5 MW).

The power plants in North Sulawesi will be the Tincep I power plant (0.6 MW), the Tincep II power plant (1 MW), the Tincep III power plant (1.2 MW).

Moelyadi said the power plants would supply power to isolated villages in their vicinity.

He said currently PLN supplied the villages with diesel power, but due to the high cost the company planned to close down its diesel generators once the six hydropower plants came into operation in 2000.

The consortium plans to invest between US$25.6 million and $34.2 million for the projects.

"The projects will be wholly financed with equity. Maybe this is the country's first power project to be wholly financed with equity," Triputra president ID Irwan Mussry said.

He said the consortium would soon sign a 20-year build-own- operate power purchase agreement with PLN.

In accordance with the law, PLN will buy power from small- scale power plants, such as the ones to be built by the consortium, in rupiah-denominated prices annually set by a mines and energy ministerial decree.

"Negotiations are not necessary for the prices of electricity from small-scale power plants," said Irwan.

The government sets different prices for small-scale plants for each province. Currently prices for minihydro power plants are Rp 162.75 per kilowatt hour (kwh) for North Sulawesi and Rp 189.75 for West Sumatra.

El Paso Energy International's executive vice president for Asia, David Veiseh, said the involvement of El Paso in the project emphasized the company's commitment to be part of Indonesia's growth.

"Being part of Indonesia's growth does not only mean to take part in only big power projects, but also in small projects," Veiseh said.

El Paso has a stake in PT Energi Sengkang, which is developing a 135-MW combined cycle power plant. (jsk)