Cilegon power project halted; lack of financing-PLN

Plans to build a 400-megawatt power plant in Cilegon, West Java have been stalled after a lack of financing prompted investors to abandon the project, Dow Jones Newswires quoted as an official at state-owned power company Perusahan Listrik Negara said on Friday.

Power generating equipment manufacturer Ansaldo Energia of Italy was the foreign investor backing the construction of the intended coal-fired steam power plant, said Parno Isworo, finance director of PLN.

The investors, including a local partner Daya Listrik Pratama, have sold the land acquired for the power plant to PLN, he said.

PLN won't be able to revive the Cilegon power project until PLN can resolve its financial difficulties, he said. PLN hopes to recover from its present financial woes within the next three years, he added.

Indonesia's coordinating ministry for the rehabilitation of PLN has approved the closure of the Cilegon project and a continuation in the construction of the 1,320-MW Tanjung Jati-B geothermal power plant.

PLN and Japan's Sumitomo Corp. signed a 20-year leasing agreement, under which a special purpose company set up by Sumitomo will finance the construction of Tanjung Jati-B, he said.

PLN will lease the power plant for 20 years upon its scheduled completion in 2004 before assuming the ownership of Tanjung Jati-B, he added. (*)