PLN project attracts Middle East investor

Alfian, The Jakarta Post 

A Middle East consortium, Mine Power Holding BSC, is vying for a US$200 million coal-fired power plant project in Indonesia, state power firm PT PLN said on Thursday. 

President director Fahmi Mochtar said the consortium would take part in a beauty contest organized by PLN to win the project, located in Cirenti district, Riau Province. 

"The consortium is among four potential investors that have passed our pre-qualification assessment. We will further examine their proposals, in particular their financial capacity," Fahmi said. 

Fahmi added the power plant, with the capacity of 200 megawatt (MW), was located near a coal concession owned by state coal mining company PT Bukit Asam. 

"The investor will need about $200 million to build a power plant with that capacity," he added. 

The consortium, in a joint venture with local contractor PT Ridlatama Energy, has the financial backing of the Islamic Development Bank, he added. 

He did not name the other three participants but did say that the company was happy with the interest expressed. 

"We are very pleased, especially under the current global financial crisis." 

Indonesia is actively looking for Middle East investors for its energy projects as they are less exposed to the current financial turmoil, Energy and Mineral Resources Ministry Purnomo Yusgiantoro said on Oct. 8. 

So far however, the Middle East-based investors are yet to make any investment in Indonesia's power projects, according to PLN vice president Rudiantara. 

The winning bidder will become the project owner and operator as an independent power producer (IPP) that will then sell its power to PLN -- the country's sole distributor of electricity. 

IPPs contribute around 14 percent to the total power supply in the country. 

Fahmi said IPP development was often hampered by financial problems, even more so now that the world was having a financial crisis with liquidity drying up, making it even harder to secure financial commitments.