Gadang eyes more mini hydropower projects in Indonesia

Malaysian firm Gadang Holdings Bhd is reportedly exploring more mini hydropower supply concessions in Indonesia after it made its foray into the sector with the recent purchase of stakes in two companies.

Its 60 percent owned PT Ikhwan Mega Power, has secured a power purchase agreement (PPA) with state owned electricity firm PT Perusahaan Listrik Negara (PLN), according to Malaysian daily The Star.

Gadang?s engineering division head Khew Check Kiet said on Tuesday construction of the mini hydro power plant would next year and cashflow was expected in two years.

?We are bound by agreement to start works by early next year. We estimate we will take two years to complete but the earlier we complete, the earlier we will have cashflow from this project,? he said after the group AGM on Tuesday.

Khew said the project was a build, operate, own type with a 15-year concession.

?After 15 years, we can negotiate an extension because it is still our own facility,? he added, pointing out PT Ikhwan Mega Power operates in West Sumatra .

Gadang had also bought an 80 percent stake in the second mini hydropower PT Hidronusa Rawan Energi whose sole consumer is PLN.

Khew said PT Hidronusa Rawan Energi was expected to get a formal PPA in eight months. (*)