2 Chinese firms relocate power plants to Indonesia
Friday, December 1 2000 - 02:00 AM WIB
China Mechinery & Electric Coorporation (CMEC) and Houanang plan to relocate two power plants worth US$150 million to Indonesia, but their realizations would await Indonesia's electricity deregulation and the completion of the feasibility studies of the two projects.
Representatives of the two companies and of state electricity firm PT PLN signed a memorandum of understanding at the office of the minister of industry and trade, and the signing was witnessed by Minister Luhut B. Panjaitan.
The head of PLN's business development division, W. Sulaiman, said that parts of the financing for the two power plants would be taken up from the US$200 million export credits provided by the Chinese government. China allocated that amount of fund for Indonesia to help the latter deal with the impacts of the crisis.
The two power plants to be relocated would be powered by steam and diesel oil. The two plants had not anymore been used in China, Sulaiman said.
He explained that about five years ago, China experienced electricity crisis, and therefore, many investors built steam-powered and diesel-powered power plants. But then, the Chinese government developed nuclear-powered power plants, and this made many steam-powered and diesel-powered power plants becoming idle.
Sulaiman noted that the interest shown by the Chinese investors was expected to attract more foreign investment in Indonesia's electricity industry.
"There has no single foreign investors interested in electricity investment here (since the advent of the crisis). On the other hand, we will experience electricity crisis if there is no new supplies," Sulaiman said during the signing ceremony.
Sulaiman noted that if there was no new investment in the power plant and therefore no new electricity supplies, Java and Bali would see electricity crisis in year 2003. During this time, until year 2003, Java and Bali would need an additional power supply of 1,400 megawatt.
Besides, about 22 locations, mostly in Southern Sumatra, currently lacked of electricity supplies, averaging about 70 megawatt per day.
Sulaiman noted that the low electricity tariffs due to government intervention in electricity pricing had been discouraging investors to come to Indonesia. "Besides, there is no security guarantee for investment." (*)