ADB may help finance PLN transmission lines

Alfian, The Jakarta Post, Jakarta | Sat, 12/12/2009 1:01 PM

The Asian Development Bank (ADB) has indicated that it will provide loans for state power utility PT Perusahaan Listrik Negara (PLN) to help the company finance three major power grid construction projects requiring about US$980 million.

The three projects are the 500 kilovolt (kV) Java-Bali power transmission line, the 275 kV West Kalimantan-Sarawak power transmission line, and the 500 kV Sumatra-Melaka power transmission line, ADB said in a statement published on Friday.

"We are very happy to cooperate with PLN in projects that will strengthen the *PLN* system," director of the energy and water division at the ADB's Southeast Asia Department, Anthony Jude, said as quoted in the statement.

According to ADB, the Java-Bali transmission line will require $340 million. The West Kalimantan-Sarawak and the Sumatra Melaka transmission lines will require $150 million and $490 million, respectively.

The statement did not explain how much ADB would contribute to the three projects. However, in an earlier interview, Rehan Kausar, the ADB's infrastructure specialist with its Indonesia resident mission said they might provide $100 million for the Java-Bali transmission line.

The Java-Bali transmission line will facilitate power supply from the Paiton power plant in East Java and a floating power plant in Denpasar, Bali, to surrounding areas. PLN planning and technology director Bambang Praptono said the latter transmission line could use either tower transmission or deep-sea cables. He added that the company would conduct feasibility studies in January 2010.

"We expect to complete the studies in six months," he said. The transmission systems are expected to help the existing power system to meet the high growth of electricity demand in the Java-Bali system which is about seven percent a year.

The Sumatra-Melaka and the West Kalimantan-Sarawak power transmission lines are covered by an agreement signed between ASEAN countries. In 1997 ASEAN countries agreed to cooperate in developing 11 cross-border transmission points allowing them to exchange power during peak periods. These interconnections are expected to be working by 2015.

With the regard to the Sumatra-Melaka Peninsula power transmission line, PLN had announced that the company and Malaysia's utility company Tenaga Nasional Berhad (TNB) had agreed to transfer up to 300 megawatts of electricity to each other at their different peak periods. PLN said the interconnection would enable the company to reduce its oil-based fuel consumption during peak hours which will cut the company production cost by about Rp 1,300 per kilowatt hour (kWh).

Bambang said that PLN would begin the preparation for the three power transmission line projects in 2010 and expected the projects to be operational by 2015.