PLN to get cheap power supply from Japan's Sumitomo in 2012

The Jakarta Post, Jakarta | Fri, 01/02/2009 10:29 AM  

State power company PT PLN is set to secure about 1,320 megawatts (MW) of power from a plant constructed and run by Japan's diversified business giant Sumitomo Corporation. 

The power supply, to be provided at a competitive price, will be available in early 2012. 

PLN vice president Rudiantara said the company was confident about getting the cheap supply after Sumitomo received 200 billion yen (US$2.2 billion) in loans from a consortium of Japanese banks to finance the construction of the plant. 

The coal-fired plant, known as Tanjung Jati B, will be additional to the 1,320 MW Tanjung Jati A plant in Jepara, Central Java. 

"The loan agreement was signed last week between Sumitomo and a consortium of Japanese banks led by JBIC (Japan Bank for International Cooperation)," Rudiantara said Wednesday. 

"We hope the financial closing can be wrapped up in January so Sumitomo can start the project construction soon." 

In November, PLN and Sumitomo signed a leasing agreement for PLN to purchase power from PT Central Java Power (CJP), the Sumitomo unit that operates the plant, for 23 years before taking over the plant entirely. 

According to Rudiantara, PLN has benefited from the newly signed loan agreement between Sumitomo and JBIC because it enables PLN to buy electricity from CJP for 2.65 US cents per kilowatt hour (kWh), a price much lower than CJP's previous offer of 4.3 cents per kWh. 

"You can say the loan agreement has become a New Year's gift for PLN," Rudiantara said, adding the deal had also proved the country's power projects offered promising returns for foreign investors. 

In a bid to meet the increasingly rapid growth in national demand for electricity, PLN has been actively involved in the government-initiated construction of power plant projects to supply a total 10,000 MW. 

To complete the projects by 2010, PLN will need Rp 17.33 trillion ($1.55 billion) to build power stations and Rp 8.58 trillion for transmission systems. 

For last year only, PLN secured Rp 3.7 trillion to build power plants and Rp 7.03 trillion for transmissions systems. (hwa)