Bosowa delays S. Sulawesi power plant project

PT Bosowa Corp., the largest diversified business group in eastern Indonesia, said on Friday that it has postponed a $200 million, 250-megawatt coal-fired power plant project in South Sulawesi Province because China Development Bank was ?having problems? with financing the project

?The current global liquidity crisis has affected the venture,? said Erwin Aksa, Bosowa?s chief executive.

?We are struggling to find investors to finance it after the China Development Bank postponed its investment.?

Late last year, Bosowa told the Jakarta Globe that the project part of the government?s ?fast track? generating capacity expansion program was going ahead, and that its main financier, the China Development Bank, was committed to it. The power plant, if constructed, will be the biggest in eastern Indonesia.

Erwin said the project had to date only secured about $50 million in financing from PT Bank Rakyat Indonesia Tbk, with between $140 million and $150 million still needed.

The plant, located in Jeneponto district, South Sulawesi, is likely to be delayed until 2011 or 2012, Erwin said.

?Our investor postponed the project as it is struggling for liquidity and PLN is paying a very low price for the electricity, which convinced, them that the project would not be viable,? Erwin said, adding that local and international? commercial banks were charging high interest rates, which made it difficult for Bosowa to find other investors.

?We?re currently looking for new investors, both local and international, although we?re still negotiating with the Chinese bank to see if we can change their minds,? Erwin said. (*)