PLN may spend $1.5b for power-for-all project

The Jakarta Post, Jakarta

State-owned electricity firm PT Perusahaan Listrik Negara (PLN) plans to invest up to US$1.5 billion this year to finance a project aimed at providing electricity to every citizen nationwide by 2020, a company executive said.

The project would include the construction of new power plans and the development of 26,000 kilometers of transmission cables and networking facilities in Sumatra and Java.

PLN president director Eddie Widiono said Monday the company would invest up to 25 percent of the $6 billion needed to realize the project, while the other 75 percent would come from other parties, including the private sector.

"We will also ask the government and city administrations to provide funds for the project so that people across the country can have access to electricity," said Eddie.

Currently, about 44 percent of the country's total population of more than 220 million lives without electricity, mostly those who reside in remote areas.

To solve this matter, PLN said it has intensified efforts to boost power supplies in the country, including by constructing new power plants that would provide an additional 10,000 megawatts power supply by the end of 2009.

It is building 10 coal-fired power plants with a total capacity of 6,900 megawatts in Java and 25 power plants outside Java with a total capacity of 3,100 megawatts.

The country now produces a total of 29,000 megawatts.

Eddie said PLN will spend up to Rp 139 trillion (US$14.78 billion) for the company's operations budget this year.

From that amount, he said 60 percent will be used for fuels which will fire around 78 percent of its power plants.

PLN said it planned to save Rp 1.7 trillion on fuel expenditure next year by reducing the use of high speed diesel (HSD) and switching to the cheaper medium fuel oil (MFO).

Eddie also said PLN expected to gain Rp 149 trillion revenue from the company's operations in 2008, mainly from electricity usage and the government's subsidy.

PLN said it was upbeat about doubling its net profit of Rp 2 trillion this year from last year -- the first profit in the last eight years.

The company said at the end of last year it expected to book a net profit of Rp 1 trillion.

PLN currently has a Rp 16 trillion debt to state-owned oil and gas company PT Pertamina.

The payment method was being discussed with the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) and the Finance Ministry, Eddie said. (adt)