China to provide export credit for North Sumatra power plant

The Chinese government has agreed to provide export credit for the construction of a coal-fired power plant in Labuhan Angin, Sibolga, North Sumatra, which will be built by state owned electricity company PLN with investment of about US$230 million, Bisnis Indonesia reported on Tuesday.

?The construction of the hydropower plant will be partly financed by the Chinese government?s export credit which will amount of about US$400 million,? PLN?s president Eddie Widiono said after the signing of 16 Memorandum of Understanding (MOU) agreements between Indonesian and Chinese companies in Beijing on Monday.

Eddie, however, said that it had not been determined yet the amount of the Chinese export credits which would be used for the construction of the Labuhan Angin which would have a capacity of 4 X 55 Megawatts.

He said that the power plant which would be linked to the power grid connecting North Sumatra and Aceh was initially planned to have a generating capacity of 2 X 100 MW. But due to a shortage of funds, the power plant?s capacity was reduced to 4 X 55 MW. The construction is expected to be commenced next year.

Eddie said that the agreement to provide export credit, which would mature in 15 years including a grace period, and would carry an interest rate of 3.5 percent per annum, was part of the bilateral cooperation signed during the visit of President Megawati Sukarnoputri to China.

Megawati arrived in Beijing on Saturday for a six-day visit as part of her Asian tour. She would also visit South Korea, North Korea and India. (*)