Construction of three coal-fired power plants might be delayed

The construction of three coal-fired power plant respectively located Pacitan in East Java, Teluk Naga and Pelabuhan Ratu in Banten may be delayed if negotiation between the Indonesian government and Chinese government brought no results in the near future.

 

In May, PLN announced the consortium of Dong Fang Electric Corporation-Dalle Energy won the right to build two coal-fired power plants - Pacitan in East Java and Teluk Naga in Banten - and consortium Shanghai Electric Corporation-Maxima Infrastructure to build Pelabuhan Ratu power plant in Banten.

 

President Director of state electricity company PT PLN Eddie Widiono said in Jakarta that contracts for the development of the three projects had been signed but the construction work could not be executed because the Finance Ministry and Sinosure, a financing underwriter from China, had yet to reach an agreement over financing for the projects.

 

The three projects were won by Chinese companies. Indonesia asked Chinese banks to finance the projects but the Chinese banks refused to finance the projects unless the Indonesian government was willing to guarantee all aspects of  the projects. The Ministry of Finance was only willing to finance certain aspects of the projects.

 

Eddie said PLN expected the construction of the projects could be started by the end of the year. "If (the negotiation between the Ministry of Finance and Sinosure) fails, we shall look for funds from HSBC or a French banking firm. We are however still optimistic that the negotation will bring results," he said. (Godang)