PLN seeks for more loans

Mustaqim Adamrah, The Jakarta Post, Jakarta | Thu, 01/22/2009 4:35 PM  

State electricity firm PT PLN has secured at least US$1.35 billion in loans to run a second 10,000 MW program sponsored by the government. 

"PLN has secured loans amounting to US$1.148 billion from the World Bank to finance a project in Cisokan, West Java, and $200 million from JBIC (Japan Bank for International Cooperation) to fund a project in Asahan," Energy and Mineral Resources Purnomo Yusgiantoro told the press Wednesday. 

He was speaking after a meeting with Vice President Jusuf Kalla in the Vice President's Office. 

PLN, he said, would need to contribute $3.8 billion to fund projects under the second "10,000 MW crash program", which requires a total of $17.3 billion in investment. 

PLN president director Fahmi Mochtar, also present at the meeting, said the company would raise the funding from soft loans. 

"We already received offers of soft loans from China, Korea, the Middle East and Europe." 

According to Purnomo, out of the total $17.3 billion, the remaining $13.5 billion will be generated by private contractors. 

He said that under the program, PLN will build two power plants in the Java-Bali system, while 43 other plants will be built by private contractors, or independent power producers, comprising 22 projects in Java and Bali, and another 32 projects off the Java-Bali system on the other islands. 

"We see many contractors, particularly those from China, are interested to participate in the (second) program despite the crisis because the power sector is lucrative and these projects are all long-term, running for 30 to 40 years " he said. 

Purnomo said private contractors and PLN were expected to start public bidding in the second and third quarters of this year, respectively. 

Fahmi said the second program was scheduled for completion by 2012, "or 2013 at the latest". 

Unlike the first program, which is entirely designated for coal-fired power plants, the second program will have 12 percent of total power generated by hydro plant, 48 percent by geothermal plant, and 14 percent by gas , plus 26 percent by coal. 

The first program commenced in 2007 and is slated to finish by 2010. 

Indonesia has the world's largest geothermal reserves, with an estimated capacity of up to 27,000 MW of electricity - equal to around 40 percent of the world's geothermal reserves. 

However, Indonesia's existing 18 operational geothermal plants only produce a combined 1,050 MW.