China Huadian, PTBA to build power plant in S. Sumatra

China Huadian Corp., one of the mainland's five biggest power companies, and Indonesia's PT Tambang Batubara Bukit Asam plan to jointly build a $1.6 billion coal-fired plantin the archipelago's South Sumatra island, Bloomberg reported.

China Huadian will take a 55 percent stake and PTBA will hold 20 percent in the 2,400-megawatt plant that will start operations by 2009, PTBA president Ismet Harmaini told reporters after a meeting with investors in Jakarta. The rest will be held by PT Indika Inti Energi, partly owned by PTPerusahaan Listrik Negara, the state-owned power company.

The plant will be located at Banko Tengah, near PTBA's concession, in South Sumatra province and will consist of four units that will together use 10 million tons of coal a year, Harmaini said.

The new plant may boost sales at PTBA, in which the government holds a 70 percent stake. The company plans to buy a mine in Kalimantan to increase its thermal coal production to as much as 14 million tons a year.

About 99 percent of the coal produced in Indonesia is thermal coal, used mostly in power plants. Indonesia exported 85.6 million metric tons of coal last year, up from 74.2 million tons in 2002, according to energy ministry data.

About 85 percent of the project will be funded by loans, Harmaini said, without providing details. (*)