PLN signs $888m power contracts with Chinese firms

Ika Krismantari, The Jakarta Post, Jakarta | Sat, 04/26/2008 12:02 PM

State power firm PT PLN signed two engineering procurement contracts (EPC) worth US$888 million in total Friday with two Chinese companies for the construction of two coal-fired power plants in East Java and Aceh.

PLN signed the EPC contract for the 700-megawatt (MW) Tanjung Awar-awar power plant in East Java with a consortium of China National Machinery Equipment Corp. (Sinomac), China National Electric Equipment Corp. (CNEEC) and a local company, PT Penta Adi Samudra, with the contract estimated to be worth $642 million.

PLN signed another contract worth $247.4 million for the 200-MW Nagan Raya plant in Nanggroe Aceh Darussalam with another Chinese company, Sinohydro Corp.

PLN president director Fahmi Mochtar said the projects were expected to be completed within 2 years, with the first unit of the plant starting commercial operation in October 2010, followed by the second one in January 2011.

Both plants are part of the government's 10,000-MW power plant project, initially scheduled for completion by the end of next year, but the deadline is likely to be extended due to financial problems.

The program will see PLN build 10 coal-fired power plants with a total capacity of 6,900 MW in Java and 25 power plants with a total capacity outside Java. The program is targeted for completion by 2010.

The program is aimed at raising the country's electricity provision, which currently stands at 56 percent. This means 45 percent of Indonesia's population still lives in the dark.

Approximately 15 percent of financing for the Tanjung Awar-awar and Aceh plants will come from PLN equity, while the remaining 85 percent will come from credit commercials or global bonds.

Fahmi said the two projects had only managed to secure rupiah-denominated loans, while the company is still in talks with a number of lenders to finance the projects.

"We are still seeking the best alternative we can find to get the loans we need," Fahmi said.

The head of the government's power sector development team, Yogo Pratama, said so far the company had secured 60 percent of the $8.3 billion needed to build the power plants under the government's 10,000-MW project.

Financial status of the power project

Power plant location rupiah-denominated loans Bank dollar denominated loans Bank in trillion Rp in million US$

 

• 600-MW Labuan Banten, Java 1.18 BCA 288.6 in talks with Bank of China 
  
• 900-MW Indramayu West Java 1.2 BNI 592.2 Bank of China 
  
• 600-MW Rembang Central Java 1.9 Mandiri 261.8 Barclays 
  
• 600-MW Suralaya Banten 0.735 Mega 284.3 China Export Import Bank 
  
• 600-MW Paiton East Java 0.6 Mega 330.8 China Export Import Bank 
  
• 600-MW Pacitan East Java 1.045 consortium of Mega and 293.2 not yet to secure
  

 

Bukopin

• 900-MW Teluk Naga Banten 1.6 idem 454.9 idem
  
• 900-MW Plb. Ratu Banten 1.87 idem 481.9 idem
  
• 600-MW Tj. Awar East Java 1.49 480
  

 

Awar

• 200-MW Tarahan Baru Lampung 459.9 119.2
  
• 400-MW Pkl.susu North Sumatra 780.8 209.3
  
• 50-MW Jiranjang West Nusa Tenggara 273.8 23.8
  
• 50-MW Gorontalo Gorontalo 264.8 25.8
  
• 50-MW Amurang North Sulawesi 304.5 27.3
  
• 14-MW Tj Balai Karimun Riau 71.2 7
  
• 14-MW Ende East Nusa Tenggara 73.2 7.9
  
• 200-MW Kendari Southeast Sulawesi 97.1 10.3
  
• 200-MW Nagan Raya Aceh 0.795 161
  
• 120-MW Pulang Pisau Central Kalimantan 413.9 idem 62.1 idem 62.1