Truba and Shanghai team up for $260 million power projects

Ika Krismantari, The Jakarta Post - 2006-12-15 15:56

Jakarta, 15 December 2006 (The Jakarta Post) - China's largest electrical and mechanical equipment manufacturer, Shanghai Electric Group (SEG), formally teamed up Thursday with local company PT Truba Alam Manunggal Engineering (TAME) to build coal-fired power plants worth US$260 million in Lampung and Kuala Tanjung, North Sumatra.

The two companies signed the memorandum of understanding for the projects after being directly appointed earlier this year by state-owned power utility PT Perusahaan Listrik Negara (PLN) to help overcome the energy crises afflicting the two areas.

TAME president director Arifin Wiguna said that the two companies would start work on the construction of a 50-Megawatt (MW) power plant in Lampung and a 250-MW power plant in Kuala Tanjung in 2007.

"Thirty percent of the investment will come from our company, while the other 30 percent will be from SEG, with the remainder being financed by loans from local banks," he explained.

Arifin said that after the two plants had been completed, the power from the coal-fired plant in Lampung would be supplied to the Centra Pertiwi Bahari company, which would distribute the electricity to businesses in the area, while the power from the Kuala Tanjung plant would be supplied to PLN to help cope with power shortages in North Sumatra province.

To ensure the sustainability of their partnership in the future, SEG and TAME also signed agreements covering other sectors, including the establishment of service centers for electrical and mechanical equipment.

"We are very optimistic about the Indonesian power market," SEG vice general manager Zhou Jingyu said after the signing of the MoU.

SEG is currently also participating in a tender held by a consortium made up of local companies PT Bukit Asam and PT Indika Nasional for the construction of power plant consisting of four 600 MW generators in Bangko Tengah, Jambi.

In the tender, SEG is competing head-to-head with other Chinese companies, including Harbin Power Engineering and Dongfang Electric.