ADB to finance Sumatra-Malaysia power grid project

The Asian Development Bank (ADB) has shown its interest to finance the construction of a 200-km electric interconnection network which would link Riau in Sumatra and Malaysia, Investor Daily reported on Wednesday.

?ADB has expressed its interest to state owned electricity company PT Perusahaan Listrik Negara (PLN) about the possibility of providing the required funds for the interconnection project,? PLN?s Director for Planning and Risk Management Murtaqi Syamsuddin said.

PLN will team up with state coal mining firm PT Bukit Asam and Malaysian electricity company Tenaga Nasional Berhad (TNB) to build the power grid and a coal-fired power plant with capacity of about 2,000 MW. Under the agreement signed in October, last year, PLN and TNB would be in charge of the power grid and Bukit Asam in charge of building the power plant.

He said that the three companies would meet again this week in Riau to further discuss details of the cooperation. ?At present, PLN and TNB have agreed to carry out a joint study in seadbed which will be used to lay down the power cables,? he added.

After details were settled, the three parties would sign a contract for the construction of the power plant, the sales and purchase agreements of the electricity from the power plant to PLN and the power tariff agreements between PLN and TNB, Murtaqi said.

The power grid, which will use undersea high voltage direct current (HVDC) cable with capacity of 250 kilovolt (kV), will link Garuda Sakti in Sumatera and Gong Gulf in Malacca, Malaysia. The power supply will be obtained from a coal fired power plant with a capacity of between 800 MW and 1,200 MW which would be built by Bukit Asam in Peranap coal mine, Riau.

Part of the electricity will be used to meet the growing demand in Sumatra and the rest would be sold to Malaysia. (*)