Norwegian firm to invest $300m in hydro projects

The Jakarta Post, Jakarta

A Norwegian energy firm, KF Gruppen (KFG), plans to invest US$300 million on the building of two hydro power plants in South Sulawesi over the next three years. The two plants will have a total capacity of 133 megawatts.

KFG president director Knut Fossum said Thursday that the company would sign a memorandum of understanding for the projects with state-owned electricity firm PT Perusahaan Listrik Negara (PLN) on March 30.

The two projects are the 33-MW Alla plant and the 100-MW Bontu Batu plant, both located in Enrekang, South Sulawesi.

"We are looking for partnerships with local firms to forge sustainable cooperation to develop the technology in the future," Fossum said.

KFG, in partnership with a local firm, has already established PT Sulawesi Mini Hydro Power (SMHP), in which the Norwegian company holds a 95 percent stake, to develop five power plants with a total capacity of 30 MW as pilot schemes.

"We will sign the power purchase agreement tomorrow (Friday) with PLN for the Manipi plant, one of the five plants with a capacity of 10 MW," SMHP country manager Atot W. Saptari explained.

He said the electricity produced by SHMP would be sold at a price of Rp 469.22 (51 U.S.cents) per kilowatt hour (KwH), while PLN would sell it to consumers at around Rp 600 per KwH.

Fossum acknowledged Indonesia's huge hydro-power potential.