Clean power asia conference in nusa dua to focus on renewable energy

Antara News, Sat, May 12 2012

Denpasar (ANTARA News) - Clean Power Asia Conference (CPA), with an expected 600 professionals and experts in the field of renewable energy and cleaner fossil energy in attendance, is scheduled to be held in Nusa Dua, Bali, on 14-16 May 2012.

"The conference also brings together energy ministers from various countries, regulatory agencies, power companies, investors, and providers of services and technology to discuss the latest developments in Asia related to renewable energy and energy from fossil fuels," said Director of the CPA Program Daria La Valle in a press statement received here on Saturday.

According to Daria, Indonesia has become the model for countries in Asia in the use of electrical energy derived from renewable and clean fossil fuel.

"Indonesia is a country with the greatest potential in Asia for renewable electricity generation by clean fossil fuel," he said.

He noted that Indonesia contains the largest geothermal resources in the world. In addition, he said Indonesia has great potential in the field of bioenergy, solar, and water.

"If this potential is combined, then Indonesia would be a great power source for renewable electrical energy in Asia," he said.

He noted that speakers at the conference include Datuk Loo Took Gee, who served as Secretary General of the Ministry of Energy, Green Technology and Water Malaysia; Dr Songpope Polachan, Director General of the Department of Mineral Fuels Thailand Ministry of Energy; and Hatsady Sysoulath, Director General for Promotion of Renewable Energy Agency Ministry of Energy and Mines Laos.

Also speaking will be Dr. Lavansiri the Director, Chairman of the Thailand Energy Regulatory Commission; Dr Kardaya Warnika, Director of New Energy, Renewable Energy and Energy Conservation and the Ministry of Mineral Resources; Nur Pamudji, President Director of PT PLN, and Shinta W Kamdani, Vice-Chairman Chamber of Commerce and Industry / Chamber of Commerce.

Others speaking at the conference will be Datuk Mohd Nazri Shahruddin, Vice President Director of Power Plants Malaysia Tenaga Nasional Berhad; Yokihiro Hirabayashi, Deputy Director of International Business Development Department of Japan`s J-Power; Dr Nattakit Parkpoom, Expert Planning Division of Energy Systems Power Plant Thailand EGAT; Heru Dewanto, Commissioner of PT Cirebon Electric Power, and Anupam Datta, Calcutta Electric Supply Corporation GM India.

Editor: Aditia Maruli

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Mitsubishi to Invest Up to $20bn in Indonesia

Jakarta Globe, March 02, 2011

President Susilo Bambang Yudhoyono, right, welcoming the arrival of Mitsubishi
 Corp. CEO Ken Kobayashi and a delegation from the company at the presidential
 palace on Wednesday. The automobile company plans to invest up to $20 billion in
Indonesia. (AFP PHOTO)  

     

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Indonesia said on Wednesday that Japan's Mitsubishi Corp. planned to invest up to $20 billion in the Southeast Asian nation over 10 years in projects ranging from car making to infrastructure.

The Japanese conglomerate "will invest in several projects in Indonesia," said the head of Indonesia's Investment Coordinating Board, Gita Wirjawan, after meeting Mitsubishi president and chief executive Ken Kobayashi and President Susilo Bambang Yudhoyono.

Other projects Mitsubishi is interested in are the Jakarta area's airport railway project, construction of a sport utility vehicle (SUV) plant and construction of a power plant, officials said. Mitsubishi is already involved in Indonesia's petroleum, shipping, fertilizer and industrial machinery sectors.

Agence France Presse

PLN to build six power plants with foreign capital

Antara News, Tue, March 1 2011

Jakarta (ANTARA News) - State electricity company PLN is to build six power plants in 2011 with overseas investment totaling 3.006 billion US dollars, according to the company in a document prepared for a meeting with the parliament on Tuesday.

The investments are meant for the construction of the 2,000MW Indramayu thermal power plant (West Java), Hulu Lais thermal power plant (110MW) at Bengkalis, Riau province, Tulehu thermal power plant (20MW) in Ambon, Maluku province, Kotamobagu thermal power plant (three units, 80MW) in North Sulawesi, Sungai Penuh thermal power plant (110MW) in Jambi province and Mataloko thermal power plant (5MW) East Nusa Tenggara province.

PLN had proposed the construction of those power plants in its medium term overseas grant credit plan (DRPHLN-JM) for 2010-2014.

The Indramayu power plant will need the lion`s share of the investment of 2.971 billion US dollars, 2.525 billion US dollars is expected from overseas credit and the rest 446 million US dollars will be the counterpart funding.

Hululais will need a credit of 147 million US dollars, Tulehu needs 65 million US dollars, Kotamubago needs 110 million US dollars, Sungai Penuh requires 140 million US dollars and Mataloko needs 19 million US dollars.

PLN Finance Director Setio Anggoro Dewo said in the hearing with the House of Representatives` Commission VI that some of the projects are already in the stages of engineering study while some others in feasibility study.

He said Japan International Cooperation Agency (JICA) is to fund the Indramayu, Hulu Lais and Tulehu projects.

Kotamobagu will be funded by Kreditanstalt fur Wiederaufbau (KfW), a German government-owned development bank, based in Frankfurt, whereas Sungai Penuh and Mataloko will be financed by the Manila-based Asian Development Bank (ADB).

PLN for 2011 has allocated a capital expenditure of 77.398 trillion rupiahs and 62.13 trillion rupiahs for 2012.

For 2011 PLN breakdowns the capital expenditure of 35.87 trillion rupiahs for electricity generation, transmission 29.34 trillion rupiahs and distribution 12.186 trillion rupiahs.

On operational expenditure, PLN will spend 175.19 trillion rupiahs for fuels and lubricant and purchase of electricity from private companies.

Editor: Heru

WIKA secures $16.9 million power plant project in Timor Leste

The Jakarta Post, Jakarta | Tue, 02/08/2011

Publicly listed constructor PT Wijaya Karya (WIKA) said Monday it had secured a US$16.9 million power plant project in Timor Leste.

WIKA president director Bintang Perbowo said the power plant, with an anticipated capacity of between 50 and 100 megawatts, will be executed by WIKA subsidiary, PT WIKA Insan Pertiwi.

“This project is expected to be completed on Feb. 20, “ Bintang said Tuesday as quoted by kontan.co.id.

The firm, along with PT Mirlindo Padu Kencana, also plans to build a 50 MW diesel power plant in Pesanggaran, Bali, worth Rp 550 billion (US$ 61 million), he said.

Govt to issue guarantee for winner of C. Java electricity project

Erwida Maulia, The Jakarta Post, Jakarta | Tue, 12/21/2010

The government says it will issue a letter of guarantee for the winner of a 2 x 1,000-megawatt power plant project in Central Java, aimed at providing security for the executor of the long-term project.

Finance Minister Agus Martowardojo said Tuesday there were currently seven bidders from three different countries bidding for the project, which is the government’s prime public-private-partnership infrastructure project for the year 2010.

“We’re currently preparing the contract. Once the winner of the bid is known, we will issue the guarantee letter,” Agus said after a Cabinet meeting on public-private-partnership programs at the Vice Presidential Office in Jakarta.

He added that the tender for the power plant project would be held in January.

Different from clarification letters the government has issued for previous infrastructure projects, Agus said, a letter of guarantee would provide more clarity over clauses the government would guarantee for its partners in the execution of a public-private-partnership project.

“It covers, among other things, guarantees regarding license-related risks, force majeure risks and (state electricity company) PLN’s obligations to project companies. So it has quite wide coverage.”

Agus said the 2 x 1,000-megawatt power plant project in Central Java was estimated to be worth US$3 billion and take 54 months to construct.

Tuesday's Cabinet meeting also discussed the progress of preparations of four other public-private-partnership projects, including the construction of a railway from Manggarai in Central Jakarta to Soekarno-Hatta International Airport in Tangerang on Jakarta’s outskirts.

Japan to invest $52.9 bln in Indonesia infrastructure

Reuters Africa, By Aditya Suharmoko and Janeman Latul, Fri Oct 22, 2010

• Mix of private investment, loans, grants over 15 years
• Projects include ports and power plants

JAKARTA, Oct 22 (Reuters) - Indonesia has received $52.9 billion of investment commitments from Japan over the next 15 years to develop the country's infrastructure, Indonesia's chief economics minister Hatta Rajasa said on Friday.

The deal comes as Indonesia's government is in the midst of a long-promised infrastructure improvement campaign needed to help sustain growth momentum in its booming economy.

The government, which says it can only fund about a third of an estimated $140 billion of infrastructure needs in thenext five years, hopes improved transport links and power supply will attract further long-term foreign direct investment.

"There are 44 projects, 14 projects for 2010-2014 and 30 projects for 2015-2025," Rajasa said, adding the first phase of development will connect east Sumatra and northwest Java.

He said the first 14 projects include ports at Dumai and Lampung Panjang, a north Sumatra coal-fired power plant and electricity infrastructure in northern Sumatra island, a key producer of commodities such as coal, tin and palm oil.

The projects will be funded from a combination of private investment, loans, and grants, Rajasa said.

BETTING ON GROWTH

Japan, which is also funding a metro line in traffic-choked Jakarta, committed the investments to capitalise on a growth trajectory that it lacks at home, analysts said.

"They're barely growing domestically and they are looking to put their money into emerging markets like us in order to get a boost for their economy -- infrastructure investments have reoccurring stable income," said Chandra Pasaribu, infrastructure analyst at PT Danareksa Securities in Jakarta.

"Such commitments from the government are also benefiting Japanese companies because they will get the projects where they plan to give loans or grants."

Thanks to increased political stability and resilient growth, Indonesia's government has seen much more investor interest in long-term projects recently, and expects foreign direct investment (FDI) to jump 22 percent in 2010 from a year ago.

Higher FDI would help stabilise its long-term finances and improve its chances of getting an investment grade sovereign rating, a status that would put it on a par with BRIC nations such as Brazil and lower government borrowing costs.

South Korean firms and steel giant ArcelorMittal (ISPA.AS: Quote) are considering investments in Indonesia, while Chinese wealth fund CIC is interested in investing up to $25 billion, government officials have said.

"Japan is slightly different to China," Pasaribu said. "They put more focus on high-tech projects while China is more focused on low-end ones."

(Writing by Joseph Chaney; Editing by Neil Chatterjee)

Indonesia`s Jakarta Industrial Estate to build US$130 mln plant

Antara News, Thursday, September 30, 2010 13:53 WIB

Jakarta (ANTARA News/Asia Pulse) - PT Jakarta Industrial Estate Pulogadung (JIEP), said it would start building a 130-megawatt power plant for its own use this year.

Agus Dwitarto, the president of the company, which is owned by the Jakarta city administration, said the US$130 million project will be discussed with a number of Japanese partners next month.

The power plant will likely use gas for fuel to be supplied by state gas distributor PT Perusahaan Gas Negara (PGN, JSX:PGAS), Dwitarto said. Construction of the project will be carried out by phases with the first and second phases each with a 40-MW capacity and third phase having a capacity of 50 MW.

The project to be completed by the end of next year will guarantee power supply to all tenants of the industrial estate.

Medco Energi to Invest $1.7b in Projects by 2014

Jakarta Globe, Muklis Ali, March 30, 2010

Energy company PT Medco Energi Inter national plans to invest $1.7 billion between 2010 and 2014 in several major projects, including oil development in Libya, a company official said.

Medco Energi’s Area 47 oil project in Libya is expected to produce between 50,000 and 100,000 barrels per day and is due to start production in 2014.

“We are waiting for approval from the Libyan government for commercialization of the Area 47 block. We will fund the project with a loan of about $200 million,” Medco president director Darmoyo Doyoatmojo said late on Monday.

“Medco will also apply to the Libyan government to operate the Area 47 project.”

Darmoyo said the company was still optimistic that its liquefied natural gas project in Sulawesi would go ahead in 2014 despite issues over where the gas would be sold and whether the project would be economical.

Medco, together with state oil firm PT Pertamina and Japan’s Mitsubishi, had agreed previously to build the Donggi-Senoro LNG plant in Sulawesi, with a capacity of 2 million metric tons per year. The government wants the gas to be sold only to the domestic market, whereas the partners want to export LNG, which they say is essential if the project is to be profitable.

“This project will provide benefits not only for the companies involved but also for the government,” Darmoyo said.

Other Medco projects are the Sarulla geothermal power plant in North Sumatra, with capacity of 330 megawatts, expected to start operations in 2014, and the Block A gas field in Aceh.

Darmoyo said the Block A project would supply a fertilizer firm in Aceh and was waiting for approval by the governor.

Reuters

Govt earmarks Rp 800b for infrastructure in disadvantaged regions

The Jakarta Post, Antara, Pontianak| Sat, 03/27/2010 6:14 PM

Disadvantaged Regions Development Minister Helmy Faisal Zani said his office has allocated Rp 800 billion (US$88 million) in funds for infrastructure development in 147 regions.

"The disadvantaged regions need such an affirmative policy," said Helmy in Pontianak, West Kalimantan, on Saturday.

The minister said his office had initiated several programs for development in disadvantaged regions. They covered electricity provision and road construction.

During the visit, Helmy and Health Minister Endang Rahayu Sedyaningsih signed a Memorandum of Understanding (MoU) on a cooperation to enhance health services in remote and border areas and islands.

He said 26 out of a total of 37 regencies or cities in Indonesian border areas were categorized as disadvantaged regions. Such a condition is quite ironic as border areas function as Indonesia's front gate, he said.

"Development in remote areas is needed to accelerate the eradication of poverty there," he said.

Indonesia Gets $100 Million to Improve Java-Bali Power Distribution Systems

Asia Development Bank, 23 March 2010

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and Agence Française de Développement are providing $100 million in loans to help Indonesia overhaul a key power distribution network in a bid to save energy and cut greenhouse gas emissions.

The ADB Board of Directors today approved a loan of $50 million for the Java-Bali Electricity Distribution Performance Improvement Project. The state-owned French development agency is providing a cofinancing loan of the same amount, which will be administered by ADB.

The project will rehabilitate the overburdened distribution network of the two islands, as well as supporting the introduction of energy efficient compact fluorescent lamps and light emitting diodes. The measures will help reduce peak power load demand and system losses, and contribute to sizeable cuts in greenhouse gas emissions. It will support PT Perusahaan Listrik Negara’s (State Electricity Corporation [PLN]) plan to invest about $1.2 billion in efficiency investments in the distribution sector between 2010 and 2014.

“The project will reduce the power sector’s carbon dioxide emissions by 330,000 tons per year, while the substantial energy savings and freeing up of 200 megawatts of equivalent distribution system capacity will allow the state electricity corporation to connect about 1.2 million additional customers to the Java-Bali network,” said Sohail Hasnie, Principal Energy Specialist in ADB’s Southeast Asia Department.

To make energy savings of 400 gigawatt-hours worth an estimated $60 million a year, the project will reconfigure electrical equipment, reconductor or replace old overhead distribution lines and voltage transformers, and introduce new switching stations and capacitors. The distribution of up to 500,000 quality compact fluorescent lamps and light emitting diodes in remote areas will help demonstrate the energy savings and greenhouse gas reduction benefits of efficient lights, which last far longer and consume much less energy than commonly used incandescent bulbs.

The project is expected to be eligible for carbon credits under the Clean Development Mechanism of the Kyoto Protocol, and carbon dioxide cuts could generate close to $200,000 a year in credits for the next 5-7 years, paving the way for potential nationwide distribution of the fluorescent lamps. The value of avoided carbon dioxide emissions as a result of the project is estimated to be around $3.5 million a year.

"Indonesia recently announced that it plans to reduce CO2 emissions by 26% by the year 2020 so PLN and ADB, together with the Government of Indonesia, view this project as a step towards meeting this goal," said Mr. Hasnie.

Indonesia’s energy demand has risen sharply in recent years, but investment in new capacity has not kept pace, resulting in regular power outages in Bali and Java, and up to 90 million people - or 38% of the population - still lack access to electricity. The economy relies on costly fuel oils for over 30% of its generation needs, limiting the government’s ability to fund new infrastructure, and putting Indonesia among the top 20 polluters in the world.

PLN is now planning to sharply expand the use of coal for power generation to reduce reliance on imported oil in the short term, and the project will help offset some of the new emissions. Once the conservation and efficiency benefits of the project are proven, it will be scaled up into a sector-wide initiative, funded by a multitranche financing facility.

ADB’s loan, from its ordinary capital resources, has a 25-year term, including a five-year grace period, with interest determined in accordance with its LIBOR-based lending facility. The Agence Française de Développement loan has a 15-year term, including a five-year grace period, with interest set in accordance with the Euro Interbank Offered Rate. A $1 million grant from the multidonor Clean Energy Fund under the ADB-administered Clean Energy Financing Partnership will finance the distribution of the fluorescent lamps and light emitting diodes, while the state electricity corporation will provide $19 million equivalent, for a total project cost of $120 million.

PLN is the executing agency for the project, which is due for completion by May 2012.

About ADB

Four nuclear power plants planned for operation in 2017

The Jakarta Post, Jakarta | Sat, 03/20/2010 9:35 AM

A panel of nuclear experts said Thursday that nuclear electric power could benefit Indonesia in the future if handled correctly through complete understanding of regulations, team diligence and knowledge of plant equipment, operations and maintenance.

“What is really important is a high human motivation because it will increase both safety and availability,” Prof. Ishikawa Michio of the Japan Technology Nuclear Institute said in a seminar at the Agency for the Assessment and Application of Technology office in Central Jakarta.

“That is why you have to put a lot of money in the regulations for safety measures,” he added.

According to Hudi Hastowo of the National Nuclear Energy Agency of the Republic Indonesia, the country has done extensive preparatory work on most infrastructure issues that would allow it to introduce nuclear power.

Indonesia has established a national energy policy under Law No. 17 of 2007, which declares that nuclear energy will be part of the energy mix for 2015-2019.

As a result of this policy, the country is planning to construct four units of nuclear power plants of about 4,000 megawatts each, which are expected to start operations in 2017.

Nuclear energy is also expected to meet about 2 percent of the nation’s electricity demands by 2025.

Meanwhile, Research and Technology Minister Suharna Surapranata, who also attended the seminar on “Prospects of Nuclear Electric Power in Indonesia”, explained that energy security is crucial to national security.

“Nuclear technology is a necessity. In order to transform Indonesia into a developed country, we need to find alternative energy resources that are renewable and sustainable,” he said.

There are approximately 437 operating nuclear power plants worldwide, with 55 more units under construction.

As many as 60 countries, including Indonesia, are considering building nuclear plants, while 25 countries have shown interest in their development.

Last month civil society groups insisted that there were no urgent reasons to develop nuclear power plants in Indonesia, citing the country’s large sources of alternative energy, ranging from coal, geothermal heat, water, and wind.

They also said that the current severe energy shortage was due to the government’s failure to deal with energy resources, with most of the nation’s coal and gas being exported. (tsy)

There are approximately 437 operating nuclear power plants worldwide, with 55 more units under construction.

Singapore`s Wilmar plans US$400 mln CPO complex in E. Java

Antara News, Wednesday, February 24, 2010 21:37 WIB

Jakarta (ANTARA News/Asia Pulse) - Singapore-based Wilmar International Ltd (SGX:KD3), one of the world's largest producers of crude palm oil (CPO) hopes to start the operation of a US$400 million project in Gresik, East Java in the middle of this year.

Construction of the integrated industrial complex including cooking oil refinery, packaging, oleochemical, biodiesel and NPK fertilizer factories, began late 2009.

Wilmar is also building supporting infrastructure including a special quay and power plant, the newspaper Investor Daily said.

Source:
Business in Asia Today - Feb.24, 2010
published by Asia Pulse

Related Article:

RI, Malaysia promote new approach to CPO exports

UAE Firms Launch $5b Projects in Indonesia

Khaleej Times, Issac John,15 February 2010

DUBAI — MEC Holdings, part of the Dubai-based Trimex Group, said on Sunday that it has begun work on six major projects in Indonesia involving a total investment of $5 billion in partnership with the Government of Ras Al Khaimah.

The projects — a coal mine, railway, an aluminum smelter, a fertilizer plant, a port terminal and a power plant — are making significant headway, and the flagship $1 billion rail project is on track for commissioning in 2012, said Madhu Koneru, MEC’s Executive Vice-Chairman.

MEC Coal and MEC Infra — two special purpose vehicles set up as a joint venture between the Ras Al Khaimah Investment Authority (Rakia) and MEC Holdings —are spearheading the projects in partnership with India’s National Aluminum Co (Nalco) and Infrastructure Leasing & Financial Service Group (IL&FS), he said.

MEC Coal is developing the coalmine, which has an estimated two billion metric tonnes in coal reserves, while MEC Infra undertakes the 130-kilometer rail project.

Work on the rail track, the first private railway in Indonesia, will begin next month. The rail will link the Muara Wahau coal mine in East Kalimantan’s East Kutai district with the coast, where MEC Holdings is investing $250 million on a new port capable of handling cape-size vessels. “Land acquisition of 250 hectares for the terminal has already been completed. The port will be the region’s first fully integrated facility to load vessels using an automated conveying system,” said Koneru.

Koneru said the mine and railway would be central to a complex of facilities that includes a power plant fuelled by coal, an aluminium smelter, a fertilizer plant and a high capacity port terminal with a total integrated investment valued at $5 billion.

MEC is partnering with global railway and transportation services leader, CANAC for railway and port operations and maintenance.

With equity partner Nalco, an Indian government entity and Asia’s largest integrated aluminium complex, MEC will invest $2 billion in the greenfield aluminium smelter with capacity of 500,000 tonnes per annum. The smelter will depend on bauxite import from India. A further $2 billion investment will build a 1,250 MW coal-fired power plant and other auxiliary facilities for the smelter. Both projects are scheduled for competion in 2013.

ITNL, a subsidiary of IL &FS Group, is providing MEC financing to build the transportation infrastructure, railway network and deep-sea port, said Koneru.

“The land acquisition for all the projects is almost complete and the project is on schedule. In the next five years, MEC’s investments alone will create 5,000 new jobs in East Kalimantan,” said Koneru.

Initially, MEC is looking at a coal production of two million tonnes starting this year from its 12,000-hectare coal concession in East Kutai. Production from this site is expected to reach 32 million metric tonnes annually by 2019.

MEC Holdings’ parent company Trimex Group is a global minerals and metals conglomerate.

issacjohn@khaleejtimes.com

Indonesia will not develop nuclear power anytime soon: Minister

Nani Afrida, The Jakarta Post, Jakarta | Fri, 02/05/2010 3:01 PM

Energy and Mineral Resources Minister Darwin Zahedy Saleh said the government had yet to consider developing nuclear energy for electricity generation.

"We will exploit other available energy sources first," Darwin told reporters Friday.

He added that the government would remain open to study the development of any alternative energy, including nuclear energy.

Currently, the biggest energy source for power plants operated by state utility firm PT Perusahaan Listrik Negara (PT PLN) is still coal, which is estimated to reach 44 percent of the company's total energy production this year.

PLN also generates power from oil-based fuels (19 percent), biofuel (1 percent), hydro (7 percent), gas (26 percent) and geothermal (2 percent).

Indonesia to construct 93 power plants in 2nd project

The Jakarta Post, Alfian , Jakarta | Sat, 01/30/2010 12:53 PM | Business

The government has announced its list of 93 power plants to be built under the second 10,000-megawatt (MW) power generation scheme.

"With the issuance of the decree, the bidding for the power plant procurement can now be opened," J. Purwono, the director general for electricity and energy use, said Friday.

The power plants are expected to generate up to 10,153 MW in total. Of this figure, 5,770 MW or 57 percent will go into the Java - Bali grid, while the rest will go to the other islands across the archipelago.

This second project is expected to promote the use of clean and renewable energy, but coal-fired power plants will still contribute significantly.

Of the total capacity, up to 1,204 MW (12 percent) will be generated by hydroelectric plants; 1,660 MW (16 percent) from gas combined-cycle plants; 3,977 MW (39 percent) from geothermal plants, and 3,312 MW (33 percent) from coal-fired plants.

The biggest hydroelectric plant in the project will be the 4x250-MW Upper Cisokan plant in West Java.

The biggest gas combine-cycle plant will be the expanded Muara Tawar plant, also in West Java, with total capacity of 1,200 MW.

The 1,000-MW Indramayu power plant in West Java will be the biggest of the coal-fired plants in this second phase, while the Sarulla 1 plant in North Sumatra, with expected total capacity of 3x110 MW, will be the biggest of the geothermal power plants.

Of the total 10,153 MW power expected to be generated from the project, state electricity company PT PLN is expected to generate a little more than half, or 5,118 MW.

The remaining 5,035 MW is expected to come from plants run by independent power producers (IPPs).

Although set to produce an almost equal amount of electricity, the power plants to be built by the IPPs will require double the investment that PLN's plants warrant.

Constructing all the power plants will require US$15.96 billion in investment. Of this figure, only $5.90 billion will go to PLN.

The IPPs will require a greater capital outlay as they will focus on geothermal power plants, which are far more costly than PLN's coal-fired plants.

Of the total 3,977 MW set to be generated by geothermal, IPPs are expected to contribute 3,097 MW.

The second 10,000-MW project will include the construction of 3,490 kilometers of power transmission lines, requiring $383 million in investment.

The project is expected to be finished in 2014.

Govt to raise electricity tariffs this year

Antara News, Thursday, January 28, 2010 22:14 WIB

Jakarta (ANTARA News) - The government will go ahead with its plan to raise electricity tariffs this year as part of its efforts to reduce its subsidy burden, an energy official said.

The government was waiting for the proper time to raise the electricity tariffs, Director General of Electricity and Energy Utilization at the Energy and Mineral Resources Ministry J Purwono said on Thursday.

"But they are to be raised this year," he said.

He said the government had planned to increase electricity tariffs for medium- and large-scale subscribers by an average of 15 percent.

The increase in electricity tariffs for small-scale subscribers had yet to be set, he said.

"To be sure, small-scale subscribers still can afford the increase," he said.

The government had originally planned to increase the electricity tariffs in January. But President Susilo Bambang Yudhoyono then decided to put the plan on hold, he said.

"As a consequence, the president asked the finance minister to cover subsidy needed by state power utility PT PLN," he said.

Purwono said as of 2014 the government would only give electricity subsidy to small-scale subscribers belonging to 450 volt ampere (VA) class and 900 VA class.

The policy was put in the road map for the diversion of electricity subsidy to other sectors between 2010 and 2014, he said.

Indonesia Sweetens Deal for Private Power Companies

Jakarta Globe, Janeman Latul

A pre-paid electricity customer topping up his account. The government wants independent power producers to build most of the new power plants in the second phase of its “fast-track” electricity project. (Antara Photo)

The government will scrap import duties on equipment needed to build power plants to encourage independent companies to build plants in the second phase of its “fast-track” electricity generating program.

A presidential decree to this effect, obtained by the Jakarta Globe on Thursday, was signed last week.

“The construction of power plants will be exempt from import duties and enjoy other facilities that will be regulated by the Finance Ministry,” the decree said.

However, one private sector energy firm interested in participating in the fast-track program said the government would need to offer more incentives to independent producers if it wanted them to build plants in the second phase of the program.

The ambitious $15.6 billion program calls for the construction of 82 new coal-fired, geothermal, hydroelectric, and natural gas-fired power plants across the country to alleviate chronic power shortages, with the plants expected to come online between 2013 and 2015.

The government hopes to entice independent producers to build the majority of the plants — 58 — and supply a total capacity of 4,262 megawatts of power. Many of the plants to be built by independent producers would be in remote, sparsely populated areas.

PLN will build the remaining 24 plants with a combined capacity of 6,415 MW.

Erwin Aksa, president director of PT Bosowa, a diversified business conglomerate involved in the energy sector, said that while he welcomed the presidential decree it was unlikely to be enough to encourage independent producers to get more involved in the sector.

“It’s a good start, but the power producers need more certainty because we’re not the only country in Asia that is trying to attract investors to infrastructure projects,” Erwin said. “Investors would first be looking to see whether our project offers a better return than in other countries. Incentives, including tax breaks and guarantees on land acquisitions, should also be included in the decree, to make the policy comprehensive and attractive.”

The decree also guaranteed that PLN would purchase electricity from independent producers involved in the “fast-track” program, with the details to be issued later by the Finance Ministry.

Currently, state electricity company PT Perusahaan Listrik Negara’s generating capacity is only sufficient to supply about 60 percent of national demand for electricity.

PLN buys electricity from private producers to partially meet the shortfall.

Independent producers have only recently been allowed to supply PLN with power. Previously, they were only permitted to supply large industrial users with factories located near their plants.

Jacobus Purwono, the Energy Ministry’s director general of electricity and energy utilization, said on Wednesday that the government planned to subsidize the cost of power PLN bought from private producers.

Currently, government subsidies on electricity force PLN to sell power at as little as 40 percent of production costs, and it has often demanded equally low prices from independent producers.

Low electricity prices and a lack of government guarantees on projects have scared many investors away from “fast-track” projects.

In the first phase of the “fast-track” program, which is still ongoing, PLN is building 14 new coal-fired plants.

Indonesia says UAE fund plans to invest $5.2 bln

Reuters, Thu Jan 7, 2010 3:16am GMT

JAKARTA, Jan 7 (Reuters) - The UAE's Middle East Coal (MEC) plans to invest $5.2 billion in infrastructure in Indonesia's East Kalimantan including a power plant, a railway and a smelter, the head of Indonesia's investment agency (BKPM) said.

The projects in the province on Borneo island include an around 140-km railway, a 1,400 megawatt coal-fired power plant and an alumina smelter, Gita Wirjawan said late on Wednesday.

Wirjawan confirmed the plans in a mobile phone text message to Reuters, adding: "as for the railway project, the land clearing has been done in the past months and the first stone will be laid in March."

MEC from the emirate of Ras Al Khaimah is a joint venture between UAE investment fund RAK Minerals and Metals Investments (RMMI) and UAE-based mining company Trimex.

Wirjawan said that the projects were expected to be completed within the next 3-4 years as investors had received financing commitments from Middle East banks and had the technology needed for the projects.

Resources-rich East Kalimantan has big reserves of coal and other minerals.

Indonesia, the world's most populous Muslim nation, has been keen to attract more foreign investment investment from the Middle East.

The Southeast Asian country expects foreign direct investment to rise 15 percent this year after only reaching just below $10 billion last year, according to data from the investment agency.

(Reporting by Dicky Kristanto and Andreas Ismar; Editing by Ed Davies)

PLN to secure $230m loan from JBIC

Alfian, The Jakarta Post, Jakarta | Thu, 01/07/2010 9:27 PM

State power utility PT PLN will secure a loan worth US$230 million from the Japan Bank for International Cooperation (JBIC) to finance the construction of a hydro-power plant in North Sumatra.

The power plant is the third Asahan Power Plant with a total power capacity of 180 megawatts (MW), PLN’s director for planning and technology Nasri Sebayang told reporters Thursday.

“JBIC will finance all the project except for land [acquisition] and environment,” Nasri said.

He added that PLN was currently conducting a detailed feasibility study on the project. “The project construction is expected to begin in January next year and to be completed in 2014,” Nasri said.

He added that the Asahan power plant was not included in the 10,000 MW electricity accelerated program, a massive power plant development program designed to help compensate for the absence of power plant investment and construction since the Asian financial crisis hit Indonesia in 1998.

Power supply problems overcome by October 2010 : Minister

Antara News, Tuesday, January 5, 2010 00:05 WIB | Economic & Business

Jakarta (ANTARA News) - The electricity supply problems in a number of regions in Indonesia will be overcome by October 2010, Coordinating Minister for Economic Affairs Hatta Radjasa said here on Monday.

"Outages in a number of regions will be overcome in the next 10 months," he said in his evaluation of economic performance in 2009 and prospects for 2010.

He said the state electricity company PLN would take steps to overcome electricity crisis in several regions by among others continuing the purchase of excess power of other companies.

In terms of finance, he said, the government would improve PLN's finance by increasing its funding to reach Rp30 trillion.

The additional funding would be taken from the increasing margin from formerly five percent against the principle production cost (BPP) to eight percent.

With the BPP in 2009 reaching Rp140 trillion an increase of one percent in margin would need Rp11.2 trillion.

By increasing the margin from five to eight percent it means PLN's margin would increase from Rp7 trillion to Rp11.2 trillion.

"Based on one percent increase in margin PLN will be able to borrow up to Rp7 trillion and so with an increase of three percent PLN's debt capacity will reach Rp21 trillion," he said.

The rest, he said, would be covered with the government's capital participation totalling Rp10 trillion.

"The additional Rp30 trillion funds will make PLN healthy and at the same time able to overcome outages this year," he said.

As the government will not raise the electricity tariff the increased margin would be covered by subsidy hike. "We will discuss it with the House of Representatives," he said.

PLN recorded by October 2009 11 of 24 national electricity systems suffered a deficit of power by 460.2MW.Only two systems under normal conditions and 11 others are on alert, he said.

He said PLN categorizes its power system into three namely normal when no outage occurs and operational reserves are bigger than the biggest unit of generators, alert when no outage occurs but the potential is there because operational reserves are smaller than the biggest unit of generators and then deficit when outages occur because power is smaller than the peak burden or transmission system is disrupted.

Eleven systems detected to suffer a deficit are the southern part of Sumatra (198.3 MW), South Sulawesi (145.7 MW), the northern part of Sumatra (70MW), Minahasa (27.51 MW), Tanjung Pinang (7.4 MW), Palu (5.96 MW), Kendari (2.1 MW), Poso (1.71 MW), Sampit (0.8 MW), Ambon (0.56 MW) and Singkawang (0.16 MW).

The systems that are normal are the Java-Bali and Bontang while the systems under alert are Bangka, Belitung, Batam, Pontianak, Lombok, Barito, Mahakam, Gorontalo, Kupang, Ternate and Jayapura.